The management rights dispute of the Hanmi Pharmaceutical Group has effectively concluded after about a year. Chairwoman Song Young-sook and Vice Chairman Lim Joo-hyun's friendly shareholders, Shin Dong-guk, chairman of Hanyang Precision, and private equity fund (PEF) operator Laderpangs, agreed to purchase 5% equity of their eldest son, Lim Jong-yun, a director at Hanmi Science. As a result, the existing 'four-party alliance' equity increased from 49.42% to 54.42%, while the equity of the Lim brothers, Lim Jong-yun and Lim Jong-hoon, increased to 21.8%. With the four-party alliance securing a majority stake, it is interpreted that the spark of conflict has almost disappeared.
Notably, Chairman Shin is once again investing hundreds of millions of won to purchase equity in his name. This time, Chairman Shin decided to invest 759 billion won to acquire the director's equity. Previously, he had agreed to purchase mother and daughter equity for 644 billion won, meaning he has effectively concluded this management rights dispute with a total of 1.4 trillion won. In the case of Laderpangs, a fund is created to raise funds, but since Chairman Shin is a private individual, it remains unclear how he will secure the purchase funds. Industry insiders speculate that he might use dividends from unlisted companies he personally owns or borrow against the listed stocks he holds.
According to the investment bank (IB) industry on the 27th, Chairman Shin will invest a total of 1.4 trillion won in two rounds to acquire equity from Chairwoman Song and Vice Chairman Lim and Director Lim. Previously, in September, he invested 644 billion won to buy 2.55% equity from Chairwoman Song, and this time, he is investing 759 billion won to purchase 3% equity from his eldest son, Director Lim.
As Chairman Shin successively invests hundreds of millions of won in acquiring shares of the Hanmi Pharmaceutical family, market interest is focused on how he can secure such substantial funds under his name. In response, a Hanmi Pharmaceutical official noted, 'We have no idea about this matter.'
Chairman Shin is a businessman operating Hanyang Precision in Gimpo, Gyeonggi Province, and is a close hometown junior of the late Lim Sung-ki, the founder of Hanmi Pharmaceutical. Not only with Hanyang Precision but also with Hanyang S&C, H&D, and Gahyun, he essentially controls the stakes of four companies nearly single-handedly. All four companies are unlisted.
Chairman Shin is known to have substantial financial resources, but it appears he cannot easily access cash in the range of 100 billion won. For instance, he had planned to secure equity by investing 1.644 trillion won alone last September, but suddenly added Hanyang Precision as a contract participant, changing the structure to have Hanyang Precision contribute 1 trillion won, while he provided 644 billion won. It is assumed that it would have been burdensome to purchase equity worth 1.644 trillion won in his name.
Since Chairman Shin has agreed to purchase the Hanmi Pharmaceutical family's equity for 759 billion won this time, there is speculation in the industry that he may utilize dividends or collateral loans.
In the case of dividends, it is a method that Chairman Shin has used once in 2020. At that time, Chairman Shin received 1.13 trillion won in dividends all at once from Hanyang Precision, where he owned 100% equity. That year, Hanyang Precision also sold short-term financial assets worth 973 billion won, which appears to be related to dividends for Chairman Shin. Since then, Hanyang Precision has not issued dividends and has accumulated undistributed retained earnings of 1.28 trillion won (as of the end of last year).
In addition to Hanyang Precision, another affiliate, Hanyang S&C, has 334 billion won, and Gahyun has 155 billion won in undistributed retained earnings. Since there are no other shareholders besides Chairman Shin and their son Shin Yoo-seop, president of Hanyang Precision, it is expected that Chairman Shin could readily mobilize purchase funds through dividends if he so desires.
However, if Chairman Shin uses dividends, he may face a tax burden of 46.2% due to the lack of separate taxation, combining dividend income tax with local income tax. Therefore, there is speculation that he would opt for a collateral loan instead.
The most likely method is for Chairman Shin to utilize the listed stocks he holds. Currently, Chairman Shin holds 989,597 shares (7.72%) of Hanmi Pharmaceutical, and nearly half of those, 415,775 shares, have been provided as collateral for a loan of 524 billion won. The interest rate is over 5%, and the collateral maintenance ratio reaches 160-170%. Given the high collateral maintenance ratio, if he takes additional collateral loans using his held shares, he may be more likely to use Hanmi Science stock as collateral rather than Hanmi Pharmaceutical stock.
This time, he cannot obtain a collateral loan using the shares he is acquiring from Director Lim. Although these are listed stocks, they are being purchased in an over-the-counter transaction. Therefore, he has no choice but to utilize the stocks he already holds. It is understood that there are no collateral loans on the Hanmi Science stocks held by Chairman Shin personally. He personally owns a total of 10,239,739 shares (14.97%) of Hanmi Science, which exceeds 300 billion won when converted to the current market value.
Meanwhile, there are many skeptical views on whether Chairman Shin will actively take control of Hanmi Pharmaceutical's management in the future. An industry official familiar with the internal circumstances of the company noted, 'Chairman Shin is more interested in investment revenue than management' and added, 'He will likely focus more on how to sell his equity well and exit.'