KCGI Sells Hanjin Kal Shares to Hoban Construction... Equity Yield 100%

[Asia Economy Reporter Park Soyeon] The private equity fund KCGI (Kang Sung-bu Fund), which had a management rights dispute with Cho Won-tae, chairman of Hanjin Group, has realized a 100% return by selling its shares of Hanjin KAL to Hoban Construction.

According to the investment banking (IB) industry on the 28th, KCGI recently decided to sell a significant portion of its Hanjin KAL shares to Hoban Construction. Hoban Construction also announced on the same day that it would acquire 9.4 million shares of Hanjin KAL for 564 billion KRW. The scheduled acquisition date is April 4.

KCGI secured 11,620,190 shares of Hanjin KAL, with an average purchase price per share estimated between 31,105 KRW and 32,496 KRW, implying a total investment of approximately 361.4 billion to 377.6 billion KRW. Based on the closing price on the 28th (Hanjin KAL stock price at 59,400 KRW), this translates to a capital gain of at least 80.90% compared to the minimum purchase price. The actual return rate is higher. A KCGI official hinted, "Using leverage, the equity return rate is close to 100%."

As of December 31 last year, the major shareholders of Hanjin KAL were ▲Chairman Cho Won-tae and related parties with 20.93%, ▲KCGI with 17.41%, ▲Bando Construction with 17.02%, ▲Delta Air Lines with 13.21%, and ▲Korea Development Bank with 10.58%. If Hoban Construction acquires 9.4 million of the 11,620,190 shares held by KCGI, Hoban Construction will become a major shareholder holding 13.97% of Hanjin KAL shares. KCGI's shareholding ratio will decrease to 3.30%.

KCGI explained that the background for selling its Hanjin KAL shares was that conditions for exit (investment recovery) had been established. KCGI stated, "We have been striving to enhance corporate value through improvements in Hanjin Group's governance and financial structure," adding, "As a result, the debt ratio has decreased, and the financial and profit structures have been dramatically improved." Furthermore, it said, "Hanjin Group has reached a springboard for long-term growth, and through integration with Asiana Airlines, significant long-term development is expected," explaining the decision to exit.

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