Cho Won-tae signs a 37 billion won stake acquisition contract for the additional purchase of Lakeside... The friendly forces are around 39%. The term of office of four directors expires in March next year... Mountain is interested in the direction of 10.58%
There is a possibility that Hoban Group may have surpassed Hanjin Group Chairman Cho Won-tae and become the largest shareholder by purchasing additional shares of Hanjin KAL. Chairman Cho also began to expand his stake by signing a stock acquisition contract worth 37 billion won. However, even if the largest shareholder changes, there is a wall that must be overcome to secure management rights. It is a 10.58% stake in the Korea Development Bank, which has Chairman Cho's strong friendly stake, an existing board of directors without members from Hoban's side, and an uncertain future direction.
Although competition for shares between the two sides has begun in earnest, the actual change in management rights is a separate issue. If Hoban wants to participate in management, he needs to secure support from other shareholders and enter the board of directors. As the terms of office of four directors expire in March next year, attention is also focused on the process of selecting successor directors.
#### The stakes are very close... Cho Won-tae's supporters are around 39%.
As of July 10, Hoban Group's stake in Hanjin KAL was 20.15%, which was 0.42 percentage points lower than the 20.57% held by Chairman Cho and his related parties. Hoban later purchased additional stocks on the market and reported the business combination to the Fair Trade Commission last October. Although the exact size of the additional acquisition has not been disclosed, there is a possibility that the largest shareholder has changed.
Hanjin KAL announced on the 2nd that it has not confirmed whether there will be a change in the largest shareholder and that it will re-announce it until the details are confirmed or by December 1st.
Chairman Cho also began to increase his stake. On the 2nd, a contract was signed to acquire 325,000 shares of Hanjin KAL's common stock at 114,000 won per share, for a total of 37.05 billion won. The expected transaction period is from December 3 to January 1 of next year. Once the purchase is completed, the individual shareholding ratio will increase from 5.75% to 6.23%, and the combined shareholding percentage of related parties will increase to approximately 21.05%.
Chairman Cho's friendly stake is the first barrier that Hoban must overcome. If you add Delta Air Lines' 14.90% to Chairman Cho's 20.57% stake, the stake is 35.47%. Adding up to 3.83% of LX Pantos, it amounts to 39.30%. Even if Hoban becomes the sole largest shareholder, it will not be easy to secure management rights if these shareholders support Chairman Cho.
However, friendly shareholders are different from specially related persons of Chairman Cho's family. It cannot be guaranteed that all shareholders will exercise their voting rights in the same direction on each agenda item. Hoban also maintains the purpose of holding shares as 'simple investment'. It was reported that at the general shareholders' meeting last March, the company approved the reappointment of Chairman Cho as an executive director.
#### The term of office of four directors is about to expire... Mountain is paying attention to the 10.58% direction
Hanjin KAL's board of directors consists of nine members, including two internal directors and seven independent directors. There are currently no personnel announcements from Hoban. Even if the largest shareholder changes, existing board members are not automatically replaced. In order for Hoban to exert influence over management, he needs to enter the board of directors.
In March next year, the terms of four people, including Vice Chairman Ryu Kyung-pyo and Korea Development Bank's recommended independent directors Bae Seong-rye, Song Baek-hoon, and Hong Dong-pyo, will expire. As nearly half of all directors are nearing the expiration of their terms, if Hoban participates in management, a vote battle may occur in the process of selecting a successor.
In March of this year, Hanjin KAL deleted the clause excluding the cumulative voting system from its articles of incorporation and reduced the upper limit on the number of directors from 11 to 9. Cumulative voting is a system that allows voting rights, which are the number of shares held multiplied by the number of senior directors, to be concentrated on a specific candidate. If Hoban recommends its own candidate, the possibility of entering the board of directors will vary depending on the number of directors to be appointed and the voting rights of other shareholders.
The '3% rule' applied to the selection of audit committee members is also something to look into. In the process of separately electing audit committee members, a rule is applied that limits the combined voting rights of the largest shareholder and specially related persons to 3%. As the selection of general directors and vote calculations are different, the selection of institutional investors such as the National Pension Service is also important. Last March, the National Pension Service voted against Chairman Cho's reappointment as an executive director.
Korea Development Bank's 10.58% stake is another factor that could change the shareholder structure in the future. Korea Development Bank invested 500 billion won in Hanjin KAL to support Korean Air's acquisition of Asiana Airlines in 2020. At the time, he helped defend Chairman Cho's management rights, and has since been involved in major management issues in accordance with the investment agreement.
Ahead of the integration of Korean Air and Asiana Airlines scheduled for December this year, the possibility of Korea Development Bank recovering its investment is also being discussed. When selling a stake, the gap between major shareholders' shares may vary depending on the acquisition entity and the size of the sale. The specific sale schedule or method has not been confirmed.
In March next year, the terms of the three independent directors recommended by the Korea Development Bank will end. The nature of the competition for management rights may also change depending on whether Hoban can submit its own director candidates and secure support from other shareholders, and how the Korea Development Bank adjusts its holdings and board influence.
