Hankook Tire announces share buyback & increased dividend

In measures aimed at enhancing “shareholder-friendly management”, Hankook Tire intends to buy back around KRW 50 billion (£34 million) of its shares over the coming six months and will also “sharply expand” the size of its dividends. In addition, the tyre maker will form a support group for external directors and implement an electronic voting system.

Hankook Tire says that the share buyback programme decided upon by its Board of Directors aims to “enhance shareholder value.” The Board also agreed to increase dividends in order to enhance return to shareholders despite the “challenging business environments” the company faces. Subject to approval at this Friday’s Annual General Meeting, Hankook Tire’s annual dividend for 2019 will be KRW 68 billion (£46.3 million), up 22.2 per cent from 2018. Dividend per share for common stock will be KRW 550.

In addition, Hankook Tire will establish a support organisation system exclusively for outside directors and external auditors. The purpose of this is to enhance transparency within the corporate governance structure. An electronic voting system will be implemented to encourage shareholders to exercise their rights and to expand communication with shareholders. In the long term, the company plans to strengthen the role of the Board of Directors and audit bodies to establish an advanced corporate governance structure.

Other shareholder-friendly measures that Hankook Tire will undertake include a streamlining of assets in order to secure investments. The company will sell idle properties, including the site acquired for a logistics centre in Busan, South Korea. It will use funds gained through the sale of properties to “secure new growth engines”.