[Exclusive] Cho Hyun-beom: "Korea & Company Considering Interim Dividends... Enhancing Shareholder Value"

Cho Hyun-beom, Chairman of Hankook & Company Group, announced that he is considering an interim dividend to enhance shareholder value. If Hankook & Company implements an interim dividend this year, it will be the first time in the company's history to do so.

Attending a trial on charges including unfair support and embezzlement and breach of trust related to affiliates, Chairman Cho spoke with reporters on the 29th at the Seoul Central District Court in Seocho-gu, Seoul, stating this. When asked about plans to enhance shareholder value, Chairman Cho said, "We are considering passing a resolution for an interim dividend and revising the dividend policy slightly, so there is a possibility of an additional dividend in the middle of the year."

Cho Hyun-beom, Chairman of Hankook & Company [Photo by Hankook & Company]

The day before, Hankook & Company announced a year-end dividend of 700 KRW per common share. Although this is higher than the 650 KRW dividend in 2022, the dividend yield, which represents the stock price relative to the dividend, actually declined as the stock price rose. However, its subsidiary Hankook Tire & Technology (hereafter Hankook Tire) significantly increased its dividend to 1,300 KRW per share compared to 800 KRW the previous year.

At the end of last year, Hankook & Company was embroiled in a management rights dispute. Private equity firm MBK Partners attempted a public tender offer to acquire management rights by partnering with Cho Hyun-sik, advisor and eldest son of Honorary Chairman Cho Yang-rae. In response, Honorary Chairman Cho and Chairman Cho increased their shareholding to 47.22%, preventing MBK's intended public tender offer from succeeding. Chairman Cho thus retained control of management rights.

With the public tender offer failing, Chairman Cho and Hankook & Company stated, "We respect the judgment of shareholders" and "We will actively strive to enhance shareholder value going forward." Accordingly, Chairman Cho appears to have expressed his intention to strengthen shareholder return policies by considering an interim dividend for Hankook & Company.

Advisor Cho and MBK emphasized the importance of improving corporate governance and left a message that they will continue to monitor the company's situation. There were expectations that shareholder proposals, such as the separate appointment of audit committee members, would be submitted at this year's general meeting of shareholders. However, the resolution notice for the shareholders' meeting announced the day before showed that no separate agenda items were proposed.

On this day, Chairman Cho mentioned investment plans including expansion of the major affiliate Hankook Tire. When asked about this year's business plans, he said, "The big picture of this year's business plan has been finalized," adding, "We will make significant expansion investments this year." Currently, Hankook Tire plans to invest approximately 2.1 trillion KRW to expand its factory in Tennessee, USA, by 2026, and to invest 760 billion KRW in its production hub in Hungary by 2027.

Last year, Hankook Tire recorded its highest-ever performance since its founding, with sales exceeding 8 trillion KRW and operating profit surpassing 1.3 trillion KRW. A company official explained, "The strategy of expanding the ION segment, the world's first full lineup electric vehicle tire brand, and strengthening new car tire supply focused on supercars and global premium brands proved effective."

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