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Hyundai Merchant shares plunge following capital reduction decision

All News 11:25 March 04, 2016

SEOUL, March 4 (Yonhap) -- Shares of Hyundai Merchant Marine Co., an embattled shipping unit of Hyundai Group, plunged on Friday after the company earlier decided to push for a capital reduction aimed at improving its financial health.

Shares of Hyundai Merchant traded at 2,490 won (US$2.06) as of 10:53 a.m. on the Seoul bourse, down 21.2 percent from the previous day, according to market data.

After the stock market closed on Thursday, Hyundai Merchant said in a regulatory filing that it will push to cut its capital by merging every seven shares into one.

The decision is subject to approval by shareholders in a meeting scheduled in mid-March. The newly merged issues will be listed on the market on May 6.

The move is aimed at enhancing its financial health, which has been hurt by the slumping global market.

Hyundai Group has been working to salvage Hyundai Merchant, one of its key units, which has been in the red for years due to a decline in freight rates and global trade.

Recently, the group announced a set of self-rescue measures to improve the financial health of the company, including an asset sale.

Last year, Hyundai Merchant posted 253.5 billion won in operating losses, with its capital significantly eroded, raising concerns that it could be delisted from the local stock market.

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