Hyundai Elevator (017800.KS) will sell an additional 115.76 billion won ($83 million) worth of shares in Hyundai Movex (319400.KQ). The move follows sales of a combined 11% stake in Hyundai Movex by Hyundai Elevator and Chung Ji-yi, an executive director at Hyundai Movex and a member of the Hyundai Group founding family, since last year. With automation and robotics drawing fresh attention and Hyundai Movex shares surging, Hyundai Group appears to be using the holding as a source of cash.
Hyundai Elevator will sell 6.5 million Hyundai Movex shares, or 5.8% of the company, at 17,810 won each, according to a regulatory filing on the Financial Supervisory Service's disclosure system on the 16th. The total value of the sale is 115.765 billion won. Hyundai Elevator's stake in Hyundai Movex will fall to 43.04% from 48.89%. The company said the purpose of the sale was to "secure funds for shareholder returns in line with its corporate value enhancement plan." Hyundai Elevator also announced on the same day a plan to cancel 2,487,323 treasury shares, or 6.36% of its outstanding stock.
Hyundai Group has been converting its Hyundai Movex holdings into cash in a series of transactions since last year. Hyundai Elevator, which functions as the group's holding company, sold 7.8 million Hyundai Movex shares in October last year, raising 76.1 billion won. Chung, a daughter of Hyundai Group Chairwoman Hyun Jeong-eun, sold her entire holding of 4,472,473 shares, or about 4%, between March 18 and April 14 this year, raising 124.8 billion won. Hyundai Elevator also announced a plan in June this year to sell an 8% stake in Hyundai Movex but withdrew it after the share price fell sharply.
Behind the cash-raising is the rise of the robotics theme. Hyundai Movex traded below 5,000 won a share after its listing in 2021. The stock was still changing hands at around 4,000 won as recently as early last year, but the reassessment of the robot and automation industry changed the picture. Hyundai Movex shares jumped more than 10% on Aug. 25 last year, the day after the so-called yellow envelope law — amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act — was passed, and continued to climb.
The cash raised from the Hyundai Movex sales is being used to tighten the founding family's control over Hyundai Elevator. After selling her Hyundai Movex stake, Chung raised her holding in Hyundai Elevator to 1,192,990 shares, or 3.1%, as of the end of the second quarter this year, from 137,306 shares. Once Hyundai Elevator cancels the 6.36% of treasury shares announced on the 16th, Chung's stake in the company will rise to about 3.3%.