Hyundai Steel to buy back shares ahead of merger

By Park Si-soo

Hyundai Steel said Wednesday that it will buy back its own shares, worth 36 billion won ($32.18 million), to help lift its stock price and boost shareholder value.

The nation’s second-biggest steelmaker said the buyback plan was approved during a board meeting.

It will buy the shares through the end of the year through HMC Investment Securities and HN Investment and Securities.

The decision was made three weeks ahead of its acquisition of its sister company, Hyundai Hysco, through stock exchange ― the two firms’ merger is scheduled for July 1.

“We decided to buy back our own shares in the sense that our stock price is undervalued despite improving financial health,” the steelmaker said in a regulatory filing.

The firm’s first-quarter operating profit was 340.5 billion won, up 46 percent year-on-year. Its operating profit margin reached 9.8 percent, up 3.9 percent year-on-year.

According to data, the two firms, if merged, will have an annual production capacity of 30 million tons of steel products, making it one of the world’s 10 biggest steelmakers.