Hanjin Chair Boosts Stake in Korean Air Parent
Hanjin Group Chair Walter Cho is increasing his stake in Hanjin KAL, the holding company of Korean Air, through a share purchase. This move comes as Hoban Group, the second-largest shareholder, awaits an FTC antitrust review after potentially surpassing Cho’s stake. The transaction is set to occur between December 3 and January 1, with Cho acquiring 325,000 shares to bolster his position.
Cho strengthens grip on Hanjin KAL
Cho’s acquisition of 325,000 shares will raise his stake to 6.23%, with his camp’s combined holdings reaching 21.06%. Hanjin KAL stated that the purchase aims to strengthen responsible management, denying any connection to Hoban’s recent moves.
Hoban, which last disclosed a 20.15% stake in July, filed a business combination report with the Fair Trade Commission after further open-market purchases. The FTC typically reviews such filings within 30 days, but may extend the process by up to 90 days. Hoban underwent a similar review in 2022 when its stake first crossed the 15% threshold.
Hoban’s financial interest, not management control
A Hoban official stated that their interest in Hanjin KAL is purely financial, with no intention to participate in management. Hoban became the second-largest shareholder in 2022 after acquiring stakes from KCGI, a former rival of Cho’s, and later added 5.85% from Pan Ocean a year later. The company emphasized its investment-focused approach, stating, “We acquired the stake simply as an investment,” distancing itself from any management ambitions.
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Even if Hoban has taken the top spot, control of Hanjin KAL is unlikely to change hands soon. Cho can rely on support from Delta Air Lines (14.9%), Korea Development Bank (10.58%), and other friendly stakeholders, holding a combined stake. This alliance significantly outweighs Hoban’s influence, ensuring Cho’s continued dominance. Additionally, companies like LX Pantos, GS Retail, and Japan Airlines are viewed as supportive of Cho’s leadership.
The upcoming shareholders meeting will be a key event, as Hoban could nominate independent directors. However, industry officials believe that Korea Development Bank is unlikely to turn against Cho, given their history of collaboration during the Asiana merger and restructuring. The bank’s stake, while significant, is expected to remain neutral unless Hanjin faces major issues, further solidifying Cho’s position.
Hanjin KAL owns 26.13% of Korean Air, which is set to merge with Asiana in December. The holding company’s budget carriers will also combine in the same month as the shareholders meeting, marking a significant consolidation in the aviation sector.
