3-Party Alliance Successfully Completes Tender Offer for Hanjin KAL Warrants... Intensifying Shareholding Battle

On the 27th, reporters captured the interior of the main building of Hanjin Building in Jung-gu, Seoul, during the 'Hanjin KAL 7th Regular General Shareholders' Meeting'. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Yu Je-hoon] The shareholder alliance for the normalization of Hanjin Group (known as the three-party alliance) has succeeded in the public tender offer for Hanjin KAL's new share subscription warrants, signaling a further intensification of the management dispute within Hanjin Group.

According to the investment banking (IB) industry on the 13th, investors expressed their intention to sell 2.84 million shares in the Hanjin KAL warrant public tender offer conducted by the three-party alliance from the 23rd of last month until the day before. Warrants are securities that grant the right to purchase new shares of the issuing company at a predetermined price. The volume the three-party alliance announced it would buy is 1.2 million shares (Grace Holdings 800,000 shares, Bando Development 400,000 shares), which corresponds to about one-third of the unexercised warrants (3,636,363 shares).

With the success of this public tender offer, the three-party alliance increased its holdings of Hanjin KAL warrants from 446,235 shares to 1,646,235 shares. If these warrants are exercised, the three-party alliance can acquire an additional 1.48% stake in Hanjin KAL at 82,500 KRW per share. Following this warrant acquisition, the three-party alliance can maintain its current shareholding ratio of 45.23%.

On the other hand, Chairman Cho has yet to show any significant moves. Previously, on the 23rd of last month, Chairman Cho received a collateral loan of about 20 billion KRW from NH Nonghyup Bank using 700,000 shares of Hanjin KAL as collateral, but he has not engaged in any separate warrant public tender offers so far. Chairman Cho, together with his family and friendly shareholders (such as Delta Air Lines), currently holds a 41.3% stake in Hanjin KAL. However, if the shareholding is diluted due to the issuance of BW (bond with warrants), the stake could fall to about 38.7%. In this case, the gap in shareholding between the two sides would widen from the existing approximately 4 percentage points to about 6 percentage points, placing Chairman Cho at a disadvantage in the management dispute.

Some speculate that Chairman Cho may seek a 'second white knight' in the future to defend his shareholding. The three-party alliance recently opposed the sale of Korean Air's in-flight meal and in-flight sales business division (to the private equity fund Hahn & Company), stating, "If the sale is being pushed to secure friendly shares for the current management by offering a right of first refusal on the prime business division, we will investigate the truth," which aligns with this context.

This content was produced with the assistance of AI translation services.