Elliott Revives Restructuring Plan for Hyundai

U.S. activist investor Elliott Management Corp. is renewing its bid to force Hyundai Motor Group to simplify its circular ownership structure, The Wall Street Journal reports.

Elliott has amassed more than $1 billion shares in the group’s Hyundai Mobis partsmaking business and its Hyundai and Kia carmaking companies. The investment firm began to pressure Hyundai to reform early this year.

Under the current structure, Hyundai Mobis owns about 21% of Hyundai Motor, which owns 34% of Kia, which owns 17% of Hyundai Mobis. The group’s founding Chung family proposed but later scrapped a plan to merge Hyundai Mobis with a fourth member of the group, logistics company Hyundai Glovis.

At the time, the Chung plan was widely regarded by investors and analysts as a move to consolidate the ownership of Chung Eui-sun, the conglomerate’s heir apparent, and not a useful path to a more transparent corporate structure.

The Journal says Elliott’s current proposal—revealed in letters sent to the three Hyundai units—would merge Hyundai Mobis’ parts and modules operations with Hyundai Glovis. Hyundai Mobis’ service business would merge with Hyundai Motor.

The Elliott plan also would simplify the group’s structure by having Hyundai Motor buy shares from Kia and the Chung family. The entire overhaul would be monitored by a new restructuring review committee that would enable investors to more easily share ideas with Hyundai management.

Hyundai Motor says it plans to reveal its own revised plan to shareholders “in due course” and has declined to comment specifically on the new Elliott proposal.