Hyundai Motor to use cash to fund $10 billion gangnam land deal
By Bloomberg
Hyundai Motor Co., South Korea's largest automaker, will use cash to fund its share of the 10.6 trillion won ($10 billion) purchase price for a land site in central Seoul.
Hyundai Motor and its affiliates Hyundai Mobis Co. and Kia Motors Corp. won't issue debt to fund the purchase, the Seoul- based company said in an e-mail on behalf of the consortium. The automaker will build its new global headquarters at the site, which is located in the city's central Gangnam district.
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The land was put on the market in July by state-run Korea Electric Power Corp. ahead of its relocation to the south of the country as part of a government regional development plan. A Hyundai Motor-led group won the auction last month with an offer that was triple the property's assessed value, causing its shares to plunge.
The price exceeds Hyundai Motor's entire 2013 earnings as it pursues a plan to build a global center at the site. Hyundai Motor Group, headed by billionaire Chairman Chung Mong Koo, has said its plans for the site, dubbed the "yolk of Gangnam" by local media including Yonhap News, include a hotel, convention center and auto theme park as well as its own headquarters.
Hyundai Motor Group plans to move 30 of its affiliates to the new site, the group said in a statement. The company plans to house its research and development center at its current headquarters building when the new site is completed.