Shares of South Korea’s second largest auto parts maker Mando Corp. have soured upon investor’s disapproval of its plan to spin off promising business of supporting autonomous vehicles.

Mando’s stock plunged 11.17 percent on Thursday to close at 65,200 won ($58.61). Shares stayed flat Friday.

Mando announced Wednesday it will demerge autonomous driving operations into a separate entity tentatively named Mando Mobility Solution (MMS) to sharpen its focus on the new growth area. The new entity will concentrate on manufacturing self-driving auto parts, advanced driver-assistance systems technology, robotic vehicles and mobility service.

Under the split-off plan, Mando-Hella Electronics Corp. (MHE), an autonomous driving parts maker which was acquired by Mando in February, will go under the new company.

The demerger scheme will be put to vote on July 20 at the special shareholders’ meeting and the new entity will be launched on September 1.

Investors were unhappy about the plan even though the company will command over MMS and MHE as they would not get any shares in the new company.

The stock price of Mando also could fall as the new company could pose a better investment for its promising future.

"Mando needs to find ways to create synergies with the new entity by securing expertise to offset possible share dilution following the split-off,” Jang Moon-soo, a researcher at Hyundai Motor Securities Co. said.

By Moon Ga-young and Lee Soo-min

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