Hyundai El­e­va­tor share gains to three-year high in Seoul trad­ing

The Pak Banker - - Company& -

NEW YORK: Hyundai El­e­va­tor Co., South Korea's largest el­e­va­tor maker, rose to the high­est level in more than three years in Seoul trad­ing af­ter share pur­chases by Schindler Hold­ing AG and par­ent Hyundai Group stoked takeover spec­u­la­tion.

The Hyundai Group unit climbed by the daily 15 per­cent limit to 127,500 won at the 3 p.m. trad­ing close, the high­est price since Novem­ber 2007. Af­fil­i­ate Hyundai Mer­chant Ma­rine Co. gained 2.2 per­cent, the most since Dec. 16, to 37,150 won.

Hyundai El­e­va­tor rose by the limit for a sec­ond day af­ter Schindler, the world's largest maker of es­ca­la­tors, said Dec. 24 it had raised its stake to 35 per­cent. Hyundai Group's Hyundai Lo­giem Co. also boosted its stake last week, to 27 per­cent. "The share pur­chases by Schindler and Hyundai Lo­giem have spurred spec­u­la­tion that Hyundai El­e­va­tor may be a tar­get," said Ryu Jae Hyun, a Hong Kong-based an­a­lyst at Mi­rae As­set Se­cu­ri­ties Co.

Schindler bought 1.9 per­cent of Hyundai El­e­va­tor on the mar­ket for 12.9 bil­lion won, ac­cord­ing to a Dec. 24 state­ment from unit Schindler Deutsch­land GmbH.

"We in­creased our in­vest­ment to pro­tect our in­ter­ests," Bar­bara Sch­mid­hauser, a spokes­woman for Her­giswil, Switzer­land-based Schindler, said by phone to­day. "At this time, I can't say whether Schindler has any plans to buy more shares or in­crease its in­vest­ment." Hyundai Lo­giem an­nounced its stake in­crease in a reg­u­la­tory fil­ing on Dec. 21.

Hyundai Group, in­clud­ing Hyundai Lo­giem and the fam­ily of Chair­woman Hyun Jeong Eun, owns 51 per­cent of Hyundai El­e­va­tor, which is enough to main­tain con­trol, said Lee Mae Hee, a Hyundai El­e­va­tor spokes­woman.

Hyundai El­e­va­tor said on Dec. 10 that it in­tends to sell 3.6 mil­lion new shares next month. The sale was part of Hyundai Group's fundrais­ing plans as it sought to buy a con­trol­ling stake in Hyundai En­gi­neer­ing & Con­struc­tion Co. The group was stripped of its pre­ferred bid­der sta­tus last week af­ter fail­ing to al­lay con­cerns about its abil­ity to pay for the stake.

Hyundai Mer­chant also last week raised 326.4 bil­lion won sell­ing 10.2 mil­lion new shares at 32,000 won each in a rights of­fer­ing. Hyundai El­e­va­tor, the ship­ping line's biggest share­holder, bought 1.8 mil­lion shares.

Daishin Se­cu­ri­ties Co. and NH In­vest­ment & Se­cu­ri­ties Co. agreed to pur­chase new shares that were orig­i­nally of­fered to ex­ist­ing Hyundai Mer­chant share­hold­ers in­clud­ing Hyundai Heavy In­dus­tries Co. and KCC Corp. These share­hold­ers turned down the op­por­tu­nity to buy the stock in the rights of­fer­ing.

The pur­chases by Daishin and NH In­vest­ment will ease the fi­nan­cial bur­den on Hyundai Group as it will no longer need to buy the stock it­self, Mi­rae's Ryu said.

In a sep­a­rate news , it is re­ported that More U.S. com­pa­nies had their credit rat­ings boosted by Stan­dard & Poor's this year than saw them cut for the first time since 1997 as bor­row­ers in­creased prof­its and stock­piled cash.

Ford Mo­tor Co., the world's most profitable au­tomaker, and San Jose, Cal­i­for­nia-based EBay Inc. were up­graded by S&P along with 756 oth­ers, com­pared with 722 down­grades, ac­cord­ing to data com­piled by Bloomberg. In 2009, S&P slashed cor­po­rate debt grades more than three times as of­ten as it raised them, the data show. Com­pa­nies held $1.17 tril­lion of cash, the most on record com­pared with the value of their as­sets, as the U.S. re­cov­ered from the worst re­ces­sion in more than 70 years. Ris­ing con­fi­dence in the abil­ity of bor­row­ers to meet debt pay­ments led in­vestors to push rel­a­tive yields down to the low­est since 2007. "Cor­po­rate fun­da­men­tals are about as strong as we've ever seen them," said Ed­ward Mar­ri­nan, a credit strate­gist at Royal Bank of Scot­land Group Plc in Stam­ford, Con­necti­cut. The cred­it­wor­thi­ness of bor­row­ers will con­tinue to rise even as they are tempted to ac­cel­er­ate merg­ers and ac­qui­si­tions and re­pur­chase stock, ac­cord­ing to Mar­ri­nan. -Bloomberg

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