SEOUL (Reuters) - South Korean auto parts maker Hyundai Mobis Co Ltd (012330.KS) on Wednesday said it would cancel about 600 billion won ($557.21 million) in treasury shares from next year and pay dividends in more installments, to enhance shareholder value.
The announcement comes days after affiliate Hyundai Motor announced its first stock cancellation in 14 years. That, in turn, came after calls from U.S. activist fund Elliott Management for parent Hyundai Motor Group to cancel treasury shares and increase dividends.
The company’s plan is “in line with our continued efforts to enhance shareholder value,” Hyundai Mobis said in a statement which made no mention of Elliott.
The auto parts maker said it would pursue “shareholder-friendly” policies under which it will buy back and cancel around 187.5 billion won over three years from 2019. It will also cancel treasury shares currently held, worth around 400 billion won at market value, within the next year.
Hyundai Mobis said the cancellation of common stock would be its first since 2003.
It also said it would start paying dividends mid-year, rather than just annually.
Last year, Samsung Electronics Co Ltd (005930.KS) similarly pledged to increase shareholder returns after calls from Elliott. Samsung, however, rejected the U.S. fund’s call to adopt a holding company structure.
In 2015, Elliott tried unsuccessfully to block the merger of two of Samsung Group affiliates. The merger later became the center of a corruption scandal involving Samsung’s chief and led to jail time for South Korea’s former president.
($1 = 1,076.8000 won)
Reporting by Ju-min Park and Jane Chung; Editing by Muralikumar Anantharaman and Christopher Cushing