This article was displayed on the ChosunBiz MoneyMove (MM) site at 5:02 p.m. on Jan. 12, 2026.
Hyundai Group decided to repay in full the investment it raised from private equity fund (PEF) manager H&Q Korea Partners before the interest rate rises further. It comes about two and a half years after it brought in H&Q as a white knight in 2023 to protect Chair Hyun Jeong-eun's management control from Schindler.
H&Q is estimated to sell back to Hyundai Group the redeemable convertible preferred shares (RCPS) and convertible bonds (CB) it holds for about 280 billion won. Including the money recovered by converting and selling exchangeable bonds (EB) last year, the total is expected to reach 440 billion won. Through this "parting," Hyundai Group and H&Q are seen leaving an ideal case in which a private equity fund provides liquidity to defend a corporation owner's management control and completes recovery without dispute.
According to the investment banking (IB) industry on the 12th, Hyundai Group holding company Hyundai Holdings Company plans to make sequential partitioning payments within the year to repay in full the money invested by H&Q. As of the day, the total repayment, including principal and interest, is estimated at about 280 billion won.
Earlier, in Nov. 2023, H&Q invested a total of 310 billion won in Hyundai Holdings Company, the holding company of Hyundai Group, through RCPS, CB and EB. The RCPS portion was 97 billion won, the CB 133 billion won, and the EB 80 billion won.
The first product to be recovered was the EB. The EB was contracted to be exchanged for a 4.9% equity stake in Hyundai Elevator held by Hyundai Holdings Company and sold in the market, and H&Q exercised exchange rights on the entire amount in Oct. last year, selling via a block deal after hours and recovering 160 billion won. That was twice the principal.
The RCPS and CB were structured as effectively the same product, with identical call option exercise periods and interest rate terms. For both products, Hyundai Group has been able to exercise the call options since Nov. last year. Hyundai Group decided to repay the RCPS in full first and then redeem the CB; if repaid by May 2027, an annual rate of 8.5% applies. After that, the rate rises to 11%, but with preparations for full repayment essentially complete, both Hyundai Group and H&Q are said not to be considering the step-up.
An IB industry official said, "Hyundai Elevator sold its Yeonji-dong, Seoul, headquarters building last year and pocketed 450 billion won, and it is also ahead of a settlement of account dividend and quarterly dividends this year."
In Mar. last year, Hyundai Elevator reduced 307.2 billion won of capital surplus and converted it into retained earnings at the regular shareholders meeting. It plans to use this to pay a settlement of account dividend to shareholders around Apr. The market estimates the dividend at 12,000 won per share.
In addition, Hyundai Elevator introduced quarterly dividends by amending its articles of association. As a result, it plans to pay dividends at the end of May, the end of Aug., and the end of Nov. this year. If Hyundai Elevator funnels retained earnings to its parent Hyundai Holdings Company (20.13% equity) through cash dividends, Hyundai Holdings Company will receive the dividends and repay H&Q.
The financial condition of Hyundai Elevator, the core affiliate of Hyundai Group, has been improving every year. As of the end of the third quarter last year, consolidated current assets (assets that can be cashed within a year) were 1.69 trillion won, of which 700 billion won was cash and cash equivalents. Retained earnings (separate basis) reached about 850 billion won.
Sales at subsidiary Hyundai Movex, which started in the logistics automation division, are growing rapidly and lifting Hyundai Elevator's metrics. Hyundai Elevator is the largest shareholder with 55.88% equity in Hyundai Movex.
Hyundai Movex posted 340 billion won in consolidated sales in 2024, a growth rate of 27% from a year earlier. Last year as well, cumulative sales for the first to third quarters were 280 billion won, up 29% from the same period a year earlier.
With Hyundai Group deciding to repay H&Q's investment in full, H&Q logged an investment revenue of about 1.5 times and secured a successful exit track record. At the same time, by neatly wrapping up its role as Chair Hyun's white knight, it is being assessed as leaving a good precedent of private equity funds and corporations helping each other.
In 2023, the backdrop to Hyundai Group attracting investment from H&Q was its dispute with Schindler over Hyundai Elevator. Schindler filed a shareholder derivative suit, claiming it incurred massive losses due to a derivatives contract Hyundai Elevator entered into during the process of defending management control at Hyundai Merchant Marine (now HMM), and as a result Chair Hyun became liable for compensation in the 170 billion won range. Immediately after the ruling, Chair Hyun raised a stock-collateral loan from M Capital at an annual interest rate of 12% using Hyundai Elevator equity as collateral, but governance risks were highlighted in the process. Ultimately, Hyundai received investment from H&Q, repaid M Capital, and defended management control.