Hyundai Mobis, the auto parts maker affiliate of Hyundai Motor Group, said Wednesday that it will retire treasury stocks worth 587.5 billion won ($546 million) over the next three years as part of its plan to enhance shareholder value.
In a special directorate meeting, the company said that it would retire its current 1.61 million treasury stocks, worth around 40 million won, officials said.
The company currently holds 2.04 million stocks, which are to be converted into 1.61 million units after a forthcoming split merger with logistics company Hyundai Glovis.
In addition to these current stocks, the company will further acquire and retire 760,000 stocks worth 187.5 billion won gradually over the next three years, officials explained.
The nation’s largest auto parts maker also decided to carry out a quarterly dividend worth a third of the yearly total, starting in the first half of next year.
“Following the split merger and the consequent reduction in the total number of stocks, we decided to focus on acquiring and retiring stocks to improve shareholders’ value,” said a company official.
The latest plans will take effect from next year and will be revised after three years, the official added.
The company earlier pledged to use its 20-40 percent free cash flow for the sake of shareholders’ interests and to notify stakeholders of any major dividend change caused by management reasons.
Hyundai Mobis aims at stepping up its profit rate to 10 percent by year 2025.
By Bae Hyun-jung (email@example.com