S.Korea Hyundai Capital Sells Kia Shares

SEOUL (Reuters) - Hyundai Capital Services Inc., part of Hyundai Motor Group, said on Tuesday it sold its remaining 4.4 million shares in Kia Motors Corp. 000270.KS, an affiliate of Hyundai Motor Co. Ltd. 005380.KS, in a deal that sources said fetched the auto financing firm $56 million.

Hyundai Capital, also 43 percent-owned by General Electric Co.'s GE.N GE Consumer Finance, said last March it would sell its 4.95 percent Kia stake by 2007 in a bid to simplify its shareholding structure.

A spokeswoman said on Tuesday this had now been done in a number of transactions, culminating in a deal carried out overnight. “Hyundai Capital has disposed of all its stake in Kia Motors with the sale of 4.4 million shares on Monday,” said Choi Soo-kyong.

Analysts have said the sale would free Hyundai Capital from unnecessary cross-shareholdings and allow it to expand auto-loan services in China and elsewhere.

Kia shares slumped 49 percent last year amid slowing sales growth and labor strikes, as well as worries about the impact on profits of a stronger won currency KRW=.

According to sources, Hyundai Capital sold 4.37 million shares overnight at 12,000 won each -- a 5.4 percent discount to Monday’s close -- earning Hyundai Capital 52.4 billion won ($55.88 million).

ABN Amro AAH.AS and JP Morgan JPM.N managed the sale.

One source familiar with the deal said around 80 percent of the shares were sold to foreign investors, and the rest to domestic institutional investors.

Kia Motors dropped to a two-year intraday low of 11,900 won on Tuesday, but closed down 4 percent at 12,150 won. The main KOSPI stock index .KS11 ended up 0.26 percent

Additional reporting by Kim So-young