[Click eStock] "Hyundai Glovis, Major Shareholder Stake Sale Positive for Corporate Value"

[Asia Economy Reporter Ji Yeon-jin] Hana Financial Investment announced on the 6th that it maintains a buy investment opinion and a target price of 250,000 KRW regarding Hyundai Glovis' major shareholder stake sale, judging it positively as it completely alleviates concerns about overhang (massive sell-off) following the sale and avoids regulations related to internal transactions.

Song Seon-jae, a researcher at Hana Financial Investment, stated, "It is judged positively as it can avoid potential regulations related to internal transactions, completely resolves the overhang issue related to the major shareholder stake sale that minority shareholders were concerned about, and since the acquirer is a private equity fund, it is presumed to have a positive outlook on Hyundai Glovis' long-term vision."

Earlier, Hyundai Glovis disclosed through a ‘Report on Large Shareholding Status of Stocks, etc.’ after the market closed the previous day that 10% of the shares held by major shareholders Chung Eui-sun and Chung Mong-koo were sold.

The total of 3.75 million shares, equivalent to 10.0% of the total issued shares, includes 1.232 million shares (3.3% stake) held by Chung Eui-sun, Chairman of Hyundai Motor Group, and 2.518 million shares (6.7% stake) held by Honorary Chairman Chung Mong-koo. The sale price was 163,000 KRW (a 5.8% discount compared to the closing price of 173,000 KRW on January 5), amounting to 200.9 billion KRW for Chung Eui-sun and 410.4 billion KRW for Chung Mong-koo, totaling 611.3 billion KRW.

Researcher Song said, "The major shareholder stake sale is largely aimed at avoiding internal transaction regulations under the Fair Trade Act. Of the existing 30% stake, 20%?the maximum stake that can meet the regulations?was retained, and 10% was sold. Among the sold shares, Honorary Chairman Chung Mong-koo’s entire stake was sold, leaving no remaining shares, and Chairman Chung Eui-sun’s stake decreased from 23.3% to 20.0%."

The acquirer is Project Guardian Holdings, an SPC established in the Cayman Islands funded by the private equity firm Carlyle. Project Guardian Holdings has a capital of 24 KRW and total equity of 422.7 billion KRW, and it receives a 200 billion KRW stock-secured loan (3-year contract) from Hana Bank. The acquisition funds of 611.3 billion KRW are paid with 413.8 billion KRW of equity and 197.4 billion KRW of borrowed funds.

He explained, "After acquiring the shares, a joint ownership agreement will be signed with Chairman Chung Eui-sun, holding the shares as special related parties, and the right of tag-along will be secured, allowing the acquirer to request joint sale if Chairman Chung sells his shares. This ensures that the friendly shareholder ratio as a major shareholder remains unchanged, maintaining stable management control."

This content was produced with the assistance of AI translation services.