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First interrogation on the 25th of Hanjin Kal’s request for a temporary injunction against the broadcast
Considering the capital increase schedule, it is concluded with an interrogation on the 25th
M&A virtually canceled if a court order request is cited
Opinion unlikely to be cited .. compared to KCGI shareholders
If the court cites the request for interim injunction, it is very likely that Korean Air’s acquisition of Asiana Airlines will fail. This is because it is virtually impossible for Korean Air, which is experiencing financial difficulties, to acquire Asiana Airlines without the support of the Korea Development Bank.
According to related industry sources on the 23rd, on the 25th a temporary court order prohibiting the issuance of new shares will be carried out in the Seoul Central District Law on the resolution of the capital increase paid by third party allocation from Hanjin Kal requested by KCGI.
Since the Korean Development Bank’s payment date for Hanjin Kal’s paid-in capital increase is the 2nd of next month, the interrogation is likely to end once, considering the timing. It is noted that the court will make a decision no later than the 1st of the next month.
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On the 16th, Hanjin Kal and Korean Air, the holding companies of Hanjin Group, announced on the 16th that they would acquire Asiana Airlines. Meanwhile, Hanjin Kal decided to receive a total of 800 billion won in financing, including 500 billion won through the issuance of exchange bonds and 300 billion won through the issuance of exchange bonds, to through a paid-in capital increase assigned to a third party under the contract with the Korean Development Bank.
Then the trilateral alliance, which is having a management dispute with Hanjin Group, immediately protested. On the 18th, the KCGI of the trilateral federation filed an injunction requesting that the issuance of new Hanjin Kal shares for a paid-in capital increase be assigned to a third party.
KCGI argues that assigning new shares to a third party to defend management rights or control in a situation where disputes over management rights become a reality is an act that violates the right of shareholders to acquire new shares. In particular, a controversy arose over whether the Korean Development Bank’s decision to bring the two major airlines to President Cho Won-tae by injecting taxes in the context of a dispute over management rights was correct.
KCGI said: “We see this transaction as a serious situation combining the defense of the management rights of President Cho and the generous public funding of KDB. The entire financial burden of this transaction is covered by the people’s tax, but President Cho is actually a penny. He stressed that “we can consolidate the management rights by welcoming the Korean Development Bank, which will have about 10% stake in Hanjin Kal, like a white knight.”
Consequently, the key is how the court judges the purpose of issuing new shares. Considering that the court issued new actions for the purpose of defending President Cho Won-tae’s management rights, it is highly likely that the request for a temporary injunction will be cited. On the contrary, if it is considered that it was an inevitable measure to save the aviation industry in crisis due to the Corona 19 incident, the possibility of a temporary injunction is unlikely.
The Korean Development Bank emphasizes that this transaction is a way to improve the competitiveness of the aviation industry. On the 19th, the director of the Industrial Bank of Korea, Lee Dong-geol, said: “Saneun is directly involved in the integration work as a shareholder and at the same time, it is determined that it is a structure that can sufficiently ensure the supervisory role solid management while generating the will of members and management responsible for responsible management “. It was necessary to invest in ordinary shares with voting rights on a scale. In the case of a capital increase by shareholders, it took more than two months to take into account the urgent need for funds, ”he explained.
Even if the court dismisses the subpoena, the pressure from KCGI will continue.
On the 20th, KCGI requested Hanjin Kal to call an extraordinary general meeting of shareholders on the agenda to appoint a new director and change the bylaws. It means that Korean Air’s merger with Asiana Airlines is an attempt to significantly undermine the rights of existing shareholders and will hold Hanjin Kal’s board of directors accountable for this decision. “There is no reason for the KDB to take a neutral position in the dispute over management rights not to accept the provisional shareholders meeting,” also pressed the mountain.
