South Korea's top automaker Hyundai Motor and its affiliate Kia Motors have announced a plan to buy back shares worth 670 billion won (613 billion U.S. dollars) to boost share prices, which have slumped recently after the September purchase of a property at a price three times higher than the assessed value.
Hyundai will buy back a combined 2,854,783 common and preferred shares valued at 449.1 billion won in terms of Monday's closing price, the regulatory filing showed Tuesday. It marked Hyundai's first buyback in nine years.
Kia will repurchase its 4,053,633 common shares worth 220.9 billion won. The buybacks will be completed by Feb. 11 next year. Hyundai said the buybacks will stabilize share prices and improve shareholders' value.
The plan came after a consortium of the two automakers and Hyundai Mobis won an auction for land in Seoul's central Gangnam district, paying 10.6 trillion won almost triple the assessed value to the state-run Korea Electric Power.
The power supplier put the prime land on the market in July as part of its plan to relocate its headquarters south of the country to meet the government's efforts to balance regional development.
Boosted by the buyback plan, Hyundai and Kia shares advanced 5. 7 percent and two percent each. The benchmark KOSPI rose 0.2 percent.