Viteson moves to delist Halla Climate Control
By Cho Mu-hyun
Visteon, the foreign majority shareholder of Halla Climate Control (HCC), announced Tuesday that it will commence a tender offer to buy shares of minority shareholders and institutional investors in a bid to delist the Korean company.
The announcement immediately drew concerns that national technology will be leaked abroad once the U.S. automobile parts manufacturer’s plan is realized. HCC makes air conditioners and heaters used in cars.
Under Visteon’s plan the U.S. firm, which owns a 69.99 percent stake in HCC, will purchase shares of minority stockholders and institutional investors at 28,500 won per share to raise its ownership up to 95 percent and remove it from the stock exchange.
Visteon has secured a total of 915 billion won for the stock purchase by borrowing from banks using HCC as security. The offer is a public, open one or invitation by a prospective acquirer to all stockholders of a publicly traded corporation to tender their stock for sale at a specified price during a specified time.
The acquisition will improve Visteon’s climate control business portfolio and increase its presence in the global market. HCC develops advanced powertrain cooling technologies, one among many that Visteon wishes to apply to its own development projects overseas.
Visteon has further plans to expand its foothold in Korea with the establishment of the world’s largest compressor production unit. The expansion here will also lead to the development of advanced technologies for radiators, condensers, evaporators and heater cores, the company said.
HCC Chairman Shin Young-joo said Friday he and the board strongly support the acquisition of the remaining shares. There was speculation that the chairman may oppose the move when he missed a board meeting on Wednesday but he denies this.
He said he believes the buyout will “greatly help HCC’s global competitiveness.”
In contrast, HCC’s labor union is strongly protesting the buyout as they believe Visteon plans to sell the company after the acquisition for a profit. The union is urging the National Pension Service (NPS), the second largest share holder with 8.1 percent, not to sell its shares.
“We have requested that the NPS not to participate in the buyout. The NPS said it will make a final decision on the 20th or 23rd.” The national pension fund operator will earn 200 billion won if it sells its shares, while an industry official says the organization is considering asking for a higher price than the 28,500 won on offer.
The labor union is planning a protest on Thursday in front of the NPS’ headquarters in Songpa, Seoul.
HCC customer Hyundai Motor is also reportedly against the move. HCC has depended on Hyundai and Kia Motors to buy 70 percent of its products annually.
The America-based company acquired majority ownership of HCC from Ford Motor in 1999. The firm supplies climate, electronic, interior and lighting products for automobile manufacturers.