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Woo Ki-hong, Chairman of Korean Air (far left), answers questions from journalists after the 22nd meeting of the Tourism Industry Committee of the Korea Chamber of Commerce and Industry held at the Lotte Hotel in Jung-gu , Seoul, the morning of the 20th. [연합뉴스]
Korean Air’s acquisition of Asiana Airlines is a thorny road from the start. The ‘tripartite alliance’ (Cho Hyun-ah, Kangsung Wealth Fund and Bando E&C), which pits Hanjin Group Chairman Cho Won-tae over Hanjin Kal’s management rights, has set out to raise cash to secure a stake additional in Hanjin Kal. The KCGI (Kangsung Wealth Fund) also filed a temporary injunction request with the court to block the Korean Development Bank’s plan to acquire Hanjin Kal’s stake.
KCGI Subsidiary, Equity Guaranteed Loans
Cho Hyun-ah also raised funds with equity guarantees
As the mountain stalls, the stake fight grows fierce
Hanjin Cal’s ‘repo of new shares’ on the 25th is also a variable
According to the Electronic Disclosure System of the Financial Oversight Service on the 22nd, Grace Holdings, a subsidiary of KCGI, recently announced that Meritz Securities took 5.5 million shares of Hanjin Kal as collateral and borrowed 130 billion won. Instead, it canceled the contract, which had previously borrowed KRW 71 billion with 3.8 million shares as collateral from 10 financial companies, such as savings banks. The additional funds secured were approximately 59 billion won. KCGI owns 20.34% (1,156,5190 shares) of Hanjin Kal through 8 subsidiaries. Former Korean Air Vice Chairman Cho Hyun-ah also received a loan from Woori Bank (300,000 shares), Korea Capital (23,000 shares) and Merchant Securities (30,000 shares) as collateral on 29-30 last month.
A KCGI official said: “We have prepared cash in advance, as there may be situations where we can invest money in the company through a capital increase in preparation for the right to subscribe for new shares issued by Hanjin Kal.” The new share ownership rights are securities that give investors the right to buy shares of an issuer at a predetermined price. The price of new Hanjin Kal (Hanjin Kal 3WR) shares listed on the Korean Stock Exchange has plummeted 47% in the past ten days. This is because more investors believe that the value of Hanjin Kal’s new share rights has declined as KDB’s plans to support the Hanjin Group’s acquisition of Asiana Airlines came out.
KCGI filed an interim injunction with the court requesting that KCGI stop the plan to take more than 500 billion won of Hanjin Kal stock (10.66% stake). This is because if San Eun-yi appears as a “ baek knight ” (friendship game) of President Cho in Hanjin Kal’s game competition, it will be a decisive disadvantage for the trilateral alliance.
On the 25th, the Seoul Central District Court will open an interrogation for the ‘temporary injunction against the issuance of new Hanjin Kal shares’ filed by KCGI. Considering that the date the Bank of Korea decided to award Hanjin Kal 500 billion won (the date of the paid-in capital increase) is the 2nd of next month, the court ruling is expected to come out before the 1st of June. next month. Hanjin Kal said, “We will respond in accordance with legal procedures.” If the court accepts KCGI’s request for an interim injunction, Korean Air’s acquisition of Asiana Airlines will return to its original point. Sang-eun Choi, Vice President of Saneun, told a press conference on the 19th: “If (the court) cites the request for an interim injunction, the combined transaction between Korean Air and Asiana Airlines will be destroyed. In this case, we will quickly find the next best option. ”
KCGI also requested Hanjin Kal to convene an extraordinary general meeting of shareholders. However, it seems unlikely that Hanjin Kal’s board of directors will agree to an extraordinary shareholders’ meeting. Then, KCGI can ask the court to grant a temporary shareholders meeting. If Hanjin Kal’s extraordinary shareholders meeting is held with the permission of the court, the trilateral coalition is expected to raise the agenda to name those who oppose the current administration as registered directors and attempt a vote confrontation. The Fair Trade Commission initiated an internal review on the Korean Air and Asiana Airlines business combination. Fair Trade Commissioner Cho Sung-wook recently said: “We will decide (whether to approve a business combination) based on whether there are restrictions on competition in accordance with the principles and laws, and whether there are adverse effects on the welfare of the consumer”.
Reporter Kwak Jae-min [email protected]
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