Boards of Hyundai Motor, units OK signing of $10 billion land deal

Boards of Hyundai Motor, units OK signing of $10 billion land deal

by Hyunjoo Jin

The boards of Hyundai Motor Co and two affiliates on Friday approved a 10.55 trillion won ($10.12 billion) purchase of a plot of land in Seoul, the companies said, sealing a deal worth more than triple the property’s appraised amount.

The approval came a week after the Hyundai-led group – which includes Kia Motors Corp and Hyundai Mobis Co – made the bid for land to house a headquarters, hotel and theme park complex, sending their shares plunging.

The boards of the three companies had approved bidding at the Sept. 18 auction without knowing the price, which was deemed confidential, four board members told Reuters earlier.

Hyundai Motor will pay 55 percent of the price, followed by Hyundai Mobis Co Ltd with 25 percent and Kia Motors Corp with 20 percent, they said. They did not disclose whether the approval was unanimous.

The Hyundai Motor consortium plans to sign a contract on the land with the state-run Korea Electric Power Corp (KEPCO) on Friday afternoon.

Shares of Hyundai Motor were down 1.9 percent, compared with a 0.3 percent fall in the benchmark index . Kia Motors slipped 0.6 percent, and Hyundai Mobis was down 1.4 percent.

The bid for land owned by state-run Korea Electric Power Corp (KEPCO) led to the domestic unions of Hyundai Motor and Kia Motors resuming partial strikes this week, clouding the outlook for annual wage talks.