Hoban Group has initiated a merger review to become the largest shareholder of Hanjin Kal, the holding company of Hanjin Group. It is believed that Hoban has surpassed the stake held by Chairman Cho Won-tae through additional stock purchases. However, Hanjin Group maintains that there are no issues with management rights when considering friendly stakes.
According to industry sources on November 2, Hoban Group filed a merger report with the Fair Trade Commission last month regarding its additional acquisition of Hanjin Kal shares. By securing more shares through recent market purchases, Hoban appears to have met the requirements for the merger review.
Under the Fair Trade Act, companies acquiring more than 15% of a listed company's shares or becoming the largest shareholder through additional purchases while already holding over 15% must file for a merger review.
While both parties did not disclose their exact shareholding percentages, industry analysts speculate that Hoban Group's stake has likely surpassed that of Chairman Cho.
Hoban Group ignited the management rights competition in 2022 by acquiring a 13.97% stake in Hanjin Kal from private equity firm KCGI for 564 billion won. Since then, it has steadily increased its stake to 20.15% as of July this year, narrowing the gap with Cho's stake of 20.56% to just 0.41 percentage points.
To date, Hoban Group has maintained its stock ownership purpose as 'simple investment.' However, its consistent increase in holdings over the past four years and its previous participation in the bidding for Kumho Industrial, the former parent company of Asiana Airlines, suggest a potential interest in entering the aviation sector.
Indeed, Hoban Group opposed the increase in executive compensation limits at Hanjin Kal's annual general meeting last year, indicating its intent to monitor management. Nevertheless, even if Hoban becomes the largest shareholder, it does not immediately mean a transfer of management rights for Hanjin Group, as Cho's side is supported by friendly shareholders, including Delta Air Lines and the Industrial Bank of Korea.
As of July, the combined stake of Cho's side, Delta Air Lines (14.90%), and the Industrial Bank of Korea (10.58%) totals 46.05%. This means that even if Hoban Group becomes the single largest shareholder, Cho's side maintains a favorable position for defending management rights.
During the regular shareholders' meeting in June, Hanjin Kal Vice Chairman Ryu Kyung-pyo expressed confidence in defending management rights based on friendly stakes. At that time, a proposal to appoint Cho as an inside director was approved with a 93.77% approval rate.
As the shareholding competition between the two sides resurfaces, attention is turning to Hanjin Group's governance structure following the merger of Korean Air and Asiana Airlines. In particular, the direction of the Industrial Bank's stake in Hanjin Kal is considered a significant variable.
Meanwhile, Chairman Cho announced plans to acquire an additional 0.48% stake, signaling his commitment to defending management rights. The competition for control between Hoban Group and Cho Won-tae is expected to continue for the foreseeable future.
* This article has been translated by AI.
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