Hyundai Motor spun off from Hyundai Group

The much-heralded separation of Hyundai Motor Company from the Hyundai conglomerate received official blessing on Thursday as the dismantling of South Korea's largest conglomerate gathered speed.

The Fair Trade Commission said it has approved plans by the Hyundai group to spin off Hyundai Motor and nine other auto-related affiliates, including Kia Motors Company and Hyundai Precision and Industry Company, to form a separate group.

The green light from the anti-trust watchdog came after the group's founder, Chung Ju-Yung, paved the way for the spin-off by selling down his 9.1 per cent stake in Hyundai Motor to 3.0 per cent.

Hyundai Investment and Trust Company, a financial arm of the group, also shed a 1.3 per cent stake in Hyundai Motor.

The separation will lead to the Hyuundai group's total assets falling from 89.9 trillion won to 58.8 trillion won.

It will yield its position as the country's largest conglomerate to the Samsung group with 67.3 trillion won of assets. Its number of affiliates will also fall to 25.

The group has been under pressure from creditors and the government to streamline its family-controlled structure.

The spin-off of Hyundai Motor was delayed by a power struggle amongst Chung's sons, which aggravated the group's liquidity crisis.

Banks extended emergency loans to the group in return for a bold programme to restructure the bloated and debt-stricken conglomerate.

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