Schindler Holding AG (Schindler) is the second-largest shareholder of Hyundai Elevator Co. Ltd., South Korea (Hyundai) with a participation of 35% up to now. On 4 June 2013, Hyundai launched a share capital increase in the amount of KRW 97.0 billion (approx. CHF 82.4 million), excluding the preemptive rights of existing shareholders and applying a 25% discount rate. Schindler challenged the share capital increase in court, in particular because Hyundai never convincingly disclosed the ultimate use of those funds and ignored the preemptive rights of the existing shareholders. Schindler's preliminary injunction for suspension of the share capital increase was rejected by the court and the share subscription took place on 5 June 2013. Schindler did not participate in the capital increase as it expects that funds will be used by Hyundai to finance its loss-making control of Hyundai Merchant Marine Ltd. Schindler's participation in Hyundai is now reduced to 30.89%.
Hyundai's share price reacted on the share capital increase with another strong decline. Due to the constantly negative share price development since 31 December 2012, Schindler has to impair in line with IFRS its Hyundai participation by CHF 155 million. The impairment impacts the result from financing activities of the 2nd quarter and reduces the annual consolidated net profit 2013 respectively.
Attached: press statement concerning rejected capital increase, released on May 30, 2013 in Korea