A planned stake sale of the logistics unit of Hyundai Motor Group by Chairman Chung Mong-koo and his son has failed, market sources said Tuesday, apparently due to its massive scale and sales conditions. 

Chung and Eui-sun, vice chairman of Hyundai Motor Co., had sought to sell a combined 13.4 percent in Hyundai Glovis Co. with about 5 million shares to be offloaded through a block deal.

Investment bank sources said that the sale has not gone through as planned because its scale was too big to be absorbed by the market and some sale conditions were not met. The reasons were not specified.

The stake sale was seen as an effort to raise money needed for Eui-sun to gain control of the management of the group, under which are Hyundai Motor and Kia Motors Corp., the country's largest and second-largest automakers. The sale would have raised about 1.5 trillion won (US$1.39 billion).

Other industry watchers saw the move as an effort to meet toughened government regulations on intra-group transactions that are being applied to conglomerate owners and their families owning 30 percent or higher stakes in other affiliates.

Currently, the senior Chung holds 11.51 percent in Hyundai Glovis, while Eui-sun owns 31.88 percent. The sale would have lowered their combined stake in the logistics firm to slightly below 30 percent.

Chung Eui-sun, who is in Detroit to attend a motor show, told reporters that the sale plan was not intended for management right transfer but for "corporate governance." He did not elaborate further on the matter.

A Hyundai Motor official said there was no plan "at this moment" to resume the block deal sale process. He added that it might be difficult to push for the stake sale again.

Shares of Hyundai Glovis on the main local bourse closed at 255,000 won on Tuesday, falling by the daily limit of 15 percent. (Yonhap)