Hyundai Motor Company and its two subsidiaries will use the money to finance their ₩ 10600000000000 (1,000 million) purchase of land in Seoul, raising concern companies reduce spending shareholders.
Hyundai Motor, Hyundai Mobis and Kia Motors Corporation does not issue bonds to buy funds, e-mail, on behalf of the South Korean company said the consortium. The automaker will be in the field, located in the central area of the city, establishing its new headquarters in the south.
He decided to use cash, investor optimism that the manufacturing group's largest South Korean automobile cushion dividends will increase. The government announced plans in August to encourage companies to raise 10% punitive tax on businesses that cash hoard to raise wages and bonuses.
The three companies have lost more than 160 billion of total market value, because the modern leadership team, to provide three times the appraised value of the land auction won.
"We expect a higher dividend, but those hopes are gone," Xu Bute seok Midas International Asset Management Ltd., which oversees $ 10 billion of the CEO. "The three companies involved in the purchase of the property holding sufficient liquid funds, it will not affect the credit rating of the company."
The three companies have cash, cash equivalents and short-term investments of about $ 38 billion at the end of June, according to data compiled by Bloomberg.
In the third part of the board of the company, the billionaire chairman Chung Mong-koo Automotive Group, the approval of the offer not know the price of the land, according to the solidarity of corporate surveillance, economic reform, citing minutes of meetings obtained board company.
Hyundai Motor will pay 55% of the total, followed by Hyundai Mobis and 25 percent, Kia Motors rest hold. Earth was put on the market in July ahead of the relocation of the state-run Korea Electric Power Corporation, to the south of the country, as part of regional development plans of the government.
Hyundai Motor Group said its planned site, including hotels, conference centers and theme park car. The group plans 30 new sites of its subsidiaries said in a statement.
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