[Featured Stock] Hyundai Glovis Rises Strongly After Major Shareholder Stake Sale

[Asia Economy Reporter Ji Yeon-jin] Hyundai Glovis is showing strong performance on the 6th following news of the major shareholder's stake sale.

As of 9:32 AM on the same day, Hyundai Glovis was trading at 187,000 KRW, up 8.09% (14,000 KRW) compared to the previous day.

Earlier, after the market closed the previous day, Hyundai Glovis disclosed through a "Large Shareholding Report" that 10% of the shares held by major shareholders Chung Eui-sun and Chung Mong-koo had been sold.

The shares sold include 1.232 million shares (3.3% stake) owned by Chung Eui-sun, Chairman of Hyundai Motor Group, and 2.518 million shares (6.7% stake) owned by Honorary Chairman Chung Mong-koo, totaling 3.75 million shares, which corresponds to 10.0% of the total issued shares. 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.

Hana Financial Investment stated that it views the major shareholder stake sale positively, as it helps avoid regulations related to internal transactions, completely resolves concerns about overhang (large-scale selling) due to the major shareholder stake sale, and maintains a buy rating with a target price of 250,000 KRW.

Song Seon-jae, a researcher at Hana Financial Investment, said, "This move allows avoidance of 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 that they have a positive outlook on Hyundai Glovis's long-term vision, which is why we view this positively."

The acquirer of Hyundai Glovis is Project Guardian Holdings, a special purpose company (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 has secured a 200 billion KRW stock-backed loan (3-year contract) from Hana Bank. The acquisition funds of 611.3 billion KRW are paid using 413.8 billion KRW of equity and 197.4 billion KRW of borrowed funds.

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