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U.S. hedge fund Elliott Management Corp. may tone down its dividend payout demands at the next shareholders’ meeting of Hyundai Motor Group after prominent proxy advisers and a major institutional investor made clear their intentions to side with the Korean auto giant.

Elliott Management, in an email interview with Maeil Business Newspaper on Sunday, said it could revise its dividend payment proposals if it can come to an agreement with Hyundai Motor Co. and its auto parts affiliate Hyundai Mobis Co. ahead of the shareholders’ meeting this Friday.

In its call for better shareholder returns, the activist hedge fund had demanded 21,967 won ($19.34) per share from Hyundai Motor and 26,399 won from Hyundai Mobis in dividend payments, which amount to one-time payouts of 4.5 trillion won and 2.5 trillion won, respectively. Elliott owns a 3.0 percent stake in Hyundai Motor and 2.5 percent in Hyundai Mobis.

The Korean companies had balked at Elliott’s demands, claiming they were five to six times greater than current dividends and the combined payout more than four times Hyundai Motor’s net profit last year.

When asked if it would consider lowering its payout demands, Elliott said it “could make adjustments if the two companies realize the extent of their financial and management problems and come up with appropriate solutions.”

The change in Elliott’s stance comes after Hyundai Motor companies gained a vote of confidence last week from proxy advisory firms Glass Lewis & Co. and Institutional Shareholder Services (ISS) as well as Korea’s National Pension Service, which said such lavish dividend payments would hinder the auto group’s ability to invest in future technologies.

But Elliott appears unwilling to scrap its dividend proposal altogether.

“Hyundai Motor and Mobis have more than 31 trillion won in cash combined,” it said, adding that this is “more than enough liquidity for investment even after accounting for our dividend demands.”

The hedge fund continued to show its disapproval with Hyundai’s complex governance structure, saying the conglomerate’s cross-shareholding ties are “unsustainable and need improvement.” Last year, it successfully led a campaign to shoot down the auto empire’s restructuring plan, arguing it was not in the best interests of shareholders.

Separately, ISS expressed doubt about Hyundai Motor’s mid- to long-term business plans announced on Feb. 27, saying its target to reach a 7 percent operating margin and 9 percent return on equity by 2022 is unfeasible given its recent performance.

The Korean auto giant reported its first quarterly net loss in the final quarter of 2018 and ended the year at its worst since adopting new accounting standards in 2010. Earlier this month, Hyundai Motor announced it would shut down one of its five plants in China due to declining sales and is in plans to streamline operations at home.

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