[Click eStock] "Hanjin Kal, Management Dispute Virtually Over... Investment Rating Down"

Daishin Securities Report
"Judgment on the End of the Shareholder Alliance and Hanjin Group Management Dispute"

[Asia Economy Reporter Minji Lee] On the 17th, Daishin Securities downgraded its investment opinion on Hanjin Kal to underperform the market and maintained the target price at 31,000 KRW. This is because the Industrial Bank of Korea's participation in Hanjin Kal's third-party allotment capital increase effectively ended the management rights dispute between the shareholder alliance and the Hanjin Group.

[Image source=Yonhap News]

On the previous day, Hanjin Kal decided on a third-party allotment capital increase of 7,062,146 new shares, with the capital increase amounting to 500 billion KRW and the issue price reported as 70,800 KRW per share. The new shares are scheduled to be listed on the 22nd of next month. The purpose of the capital increase is to attract investment funds from the Korea Development Bank in accordance with government industrial policies to normalize the management of the company and its subsidiary Korean Air, as well as to restructure the aviation industry.

Researcher Jihwan Yang of Daishin Securities said, “With this third-party allotment capital increase, the Industrial Bank of Korea secured about 10.7% of Hanjin Kal’s shares, giving Chairman Cho Won-tae’s side a de facto advantage in the management rights dispute,” adding, “If the premium from the management rights dispute ends and the shareholding competition premium is removed, there is a possibility of a sharp adjustment in the stock price.”

The Industrial Bank of Korea plans to secure about 10.7% of Hanjin Kal’s shares through the third-party allotment capital increase related to Korean Air’s acquisition of Asiana Airlines. Assuming the Industrial Bank of Korea is an allied shareholder of Chairman Cho Won-tae, his side’s shareholding ratio is estimated to rise to 47.33%.

Chairman Cho Won-tae’s allied shares include 13,279,000 shares held by Chairman Cho and related parties, 8,816,000 shares held by Delta Air Lines, about 2,188,000 shares held by the company’s insurance and employee association, and 7,062,000 shares held by the Industrial Bank of Korea. The shareholder alliance, including KCGI, holds subscription rights for a total of 1,646,235 new shares, accounting for 37.5% of the total 4,390,920 subscription rights.

Researcher Yang explained, “Even if the shareholder alliance converts all their subscription rights into shares, their stake would be 42.9%, leaving a gap of about 4.43% compared to Chairman Cho Won-tae’s side.”

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