Hoban Group, which had held about 18% of Hanjin Kal, has raised its stake to around 20% by purchasing additional shares on the open market. As a result, the gap with Hanjin Group Chairman Cho Won-tae's side has narrowed to 0.41 percentage point. As the two sides' holdings converge, some observers are watching for a potential management dispute, but the capital market is focusing on past cases in which Hoban Group raised its stake in other companies and then sold when share prices rose to realize gains.
According to the Data Analysis, Retrieval and Transfer System on the 10th, Hoban Group's stake in Hanjin Kal rose from 18.46% to 20.15%. Based on recent filings, Chairman Cho and related parties hold 20.56% of Hanjin Kal shares. The gap in holdings between the two sides has narrowed to 0.41 percentage point.
Hoban Group holds Hanjin Kal shares through Hoban Construction, Hoban, Hoban Hotels & Resorts, and Hoban Industrial. Among these, Hoban Hotels & Resorts and Hoban Industrial have recently made steady open-market purchases to acquire Hanjin Kal shares. Hoban Group's Hanjin Kal shares increased by 1,132,900 from the previous 12,321,774 to 13,454,674. Holdings by affiliate are Hoban Construction with 7,676,827 shares (11.50%), Hoban Hotels & Resorts with 5,566,702 shares (8.34%), Hoban Industrial with 112,145 shares (0.17%), and Hoban with 99,000 shares (0.15%).
Hoban Group listed its purpose of holding the stake as simple investment. However, the industry is on high alert over the possibility of a management dispute. Hoban Group has consistently shown interest in the aviation business in the past. Backed by its strong cash-generating capacity, it has been repeatedly mentioned as an acquisition candidate in every major aviation industry restructuring, including the bid for Asiana Airlines.
Korean Air views the impact of this stake purchase on its governance structure as limited. While the gap between the two sides is only 0.41 percentage point when looking at the stakes of Chairman Cho and related parties alone, when friendly forces' stakes are added, it would be difficult for Hoban Group to threaten management control. The combined stake of the Korea Development Bank and Delta Air Lines, classified as friendly forces on Chairman Cho's side, exceeds 46%.
Some observers are focusing on past cases of realizing gains through stake sales. Hoban Group raised its stake in LS Corp., the holding company of LS Group, last year and disposed of a portion in the market in November. The investment banking (IB) industry estimated that, given the share price level at the time, Hoban Group would have earned several tens of billions of won in gains from the sale. In 2015, it participated alone in the bid for Kumho Industrial, which ultimately fell through; after the acquisition collapsed, it sold its entire 6.16% stake held at the time, earning about 30 billion won in gains.
