Muristek
Hanjin Group’s headquarters in Seoul South Korea’s activist fund Korea Corporate Governance Improvement Fund (KCGI) decided to sell its stake in Hanjin KAL, the holding company of Hanjin Group, to a local construction company. The sale reignited uncertainties over the control of Korean Air Lines Co.KCGI is set to unload all of its 17.41% stake in Hanjin KAL, the parent company of Korean Air, to Hoban Construction Ltd., according to investment banking industry sources on Monday. The value of the sale was not available, although the stake was estimated at 690.4 billion won ($562.7 million) based on Hanjin KAL’s market capitalization.The fund was the second-largest shareholder after the group chairman Cho Won-tae and affiliated persons that have 20.93% as of the end of 2021. Other major stakeholders included Bando Engineering & Construction Co. with 17.02%, Delta Air Lines Inc. with 13.21% and the Korea Development Bank with 10.58%.FAMILY FEUDKCGI has been in a dispute over Hanjin Group with the chairman Cho since 2018 when it bought a stake in the holding company. In 2020, it had formed an alliance with the chairman’s sister Cho Hyun-ah, a former vice president of Korean Air, and Bando.But the KDB’s support of the chairman created a rift within the alliance when the state-run bank participated in Hanjin KAL’s rights offering to help Korean Air’s acquisition of Asiana Airlines Inc. in November 2020.The fund later filed an injunction with South Korea’s court to bank Hanjin KAL from selling new shares to the KDB, but the request was rejected. In April last year, the three-party alliance terminated the joint ownership agreement of Hanjin KAL stocks, ending the family feud over the control of Korean Air.KCGI decided to sell the Hanjin KAL stake as its existing funds were maturing sequentially. The fund is currently holding 11.6 million shares of the company through eight special purpose companies. Four of them have expired earlier this year, while one is scheduled to mature on Jan. 10, 2023.It was unclear if Hoban will join hand with Bando to challenge Cho’s management right, while a combined stake of the two builders and the chairman’s sister mounts to 37.02%, lower than a 42.13% stake in total of the chairman and his friendly shareholders including Delta and the KDB. The sister holds a 2.59% stake in Hanjin KAL.But it is still open for Hoban to buy more shares, given its ample cash holdings, industry sources said.By Jun-Ho Cha, Nam Jeong Min and Si-Eun Parkchacha@hankyung.comJongwoo Cheon edited this article.
Most Read