Bloomberg News

Schindler Takes $166 Million Charge on Soured Hyundai Investment

June 20, 2013

Schindler Holding AG (SCHP), the Swiss maker of lifts and escalators, will take a charge of 155 million Swiss francs ($166 million) on its stake in Hyundai Elevator Co. (017800) due to a slump in the Korean company’s share price.

The impairment will be taken in the second quarter, the Ebikon-based company said in a statement late yesterday. Schindler said Hyundai Elevator’s capital increase of about 97 billion won ($84 million) this month accentuated a decline in the share price, which has dropped 47 percent this year.

The charge is a blow for Schindler, which built up a stake in the Korean company with a view to buying its elevator business. Alfred Schindler, the company’s billionaire chairman, has said that Hyundai Elevator’s management reneged on a provisional agreement in 2004 to sell most of the company. Hyundai has said it has no intention of selling the elevator business. A court challenge by the Swiss company against the capital increase was rejected.

“Everything, from a full takeover to a disposal of the stake, is possible,” Andy Schnyder, an analyst at Bank Vontobel in Zurich said in a note to investors. “The Chief Financial Officer told investors recently that there is no quick solution on the horizon.”

Schindler fell 0.1 percent to 133.40 francs at 10:12 a.m. in Zurich.

The elevator maker’s stake dropped to 30.9 percent from 35 percent as Schindler didn’t buy shares in the capital increase. While being the second-largest shareholder, the company has no seats on Hyundai Elevator’s board, limiting its influence.

Chairman Schindler has said there aren’t many alternatives left for the Korean investment.

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net


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