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Hyundai Group lose its grip over Merchant Marine

현대상선 우선주 발행 늘리기 무산

March 26, 2011

Hyundai Group narrowly lost its proposal yesterday to issue more preferred shares in an effort to increase its managerial control over Hyundai Merchant Marine, the group's flagship company.

The vote underscored a growing feud between Hyundai Group and other companies formerly associated with the Hyundai conglomerate before it was split up a decade ago.

Hyundai Group has feared that rival factions headed by Hyundai Heavy Industries and Hyundai Motor Group might be preparing an attempt to battle for control of Hyundai Merchant, which could eventually led to a takeover of Hyundai Group.

Hyundai Group had proposed increasing the ceiling on the issuance of preferred shares by Hyundai Merchant to 80 million shares from the current 20 million shares, which would have increased its voting rights over the nation's No. 2 shipping company.

Hyundai Group needed two-thirds approval among Hyundai Merchant shareholders for the share proposal, but gained 64.95 percent support, just 1.7 percent short of approval.

Hyundai Heavy Industries, KCC, Hyundai Department Store and Hyundai Development Company voted against the proposal, while Hyundai Marine & Fire Insurance abstained.

The proposal had appeared headed for approval earlier, when Hyundai Development pledged its support. Then Hyundai Development suddenly switched sides on Thursday, saying it would oppose the plan.

Hyundai Heavy and its affiliate Hyundai Samho Heavy Industries, which led the opposition, own a combined 23.8 percent in Hyundai Merchant. Hyundai Group and its allies own about 43 percent of Hyundai Merchant.

Hyundai Group said the vote revealed that Hyundai Heavy and its allies "showed their desire to take over Hyundai Merchant's management rights."

Hyundai Group is also demanding that Hyundai Motor give up a 7.8 percent stake in Hyundai Merchant it recently acquired as part of its takeover of Hyundai Engineering & Construction. Hyundai Group made an unsuccessful bid for the Hyundai E&C stake in effort to place the stake under its control.

 

By: Jung Seung-hyun [seungjung@joongang.co.kr]

http://joongangdaily.joins.com/article/view.asp?aid=2933964

 

 

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