Hedge Fund Wants Hyundai to Return $10.6 Billion to Shareholders

Activist U.S. hedge fund Elliott Management Corp. is urging Hyundai Motor Co. and its affiliates to return $10.6 billion of capital to shareholders.

The fund asks Hyundai Motor and Kia Motors to return a combined 8 trillion won ($7.1 billion), or nearly one-third of their market value. Elliott also requests that the company’s Hyundai Mobis car parts business return 4 trillion won ($3.5 billion), or nearly 25% of its capitalization.

The initiative is the latest attempt by Elliott and its leader, billionaire Paul Singer, to streamline the Hyundai and bolster shareholder value by shedding “excess capital.” Singer also has been pressing Hyundai to add more outside board members.

The fund further suggests that Hyundai sell non-core assets, including the land it acquired in 2014 for its new headquarters in Seoul. Hyundai created a furor at the time by paying 10.6 trillion won ($10 billion) for the 20-acre site, three times the land’s appraised value.

In April, Elliott revealed that it had acquired more than $1 billion worth of shares in Hyundai Motor Group, along with stakes in its Kia Motors and Hyundai Mobis affiliates. Each of the two latter units holds equity in the other two. The fund has been pushing the company to simplify its ownership structure.