Korea Development Bank reported to the National Assembly on the 17th that the timing of the sale of its stake in Hanjin KAL will be after the integration of Korean Air and Asiana Airlines. The Development Bank holds a 10.58% equity in Hanjin KAL. Hanjin Group plans to launch the integrated airline in 2026, and it appears that the Development Bank will retain its equity in Hanjin KAL at least until the end of next year.
The Development Bank recently reported to the National Policy Committee regarding the sale of its equity in Hanjin KAL, stating, "It is necessary to maintain investment until the restructuring of the aviation industry is complete. We will review plans to retrieve the investment considering market conditions after the merger of Korean Air and Asiana Airlines." This suggests that they will consider the sale after the planned integration of the two airlines in 2026.
The Development Bank acquired its equity in Hanjin KAL at the end of 2020 to assist Korean Air in acquiring Asiana Airlines. A representative of the Development Bank noted, "We will be able to decide on the sale of our equity after the restructuring is complete."
Recent speculation has emerged in the business community that the Lee Jae-myung government will sell the Development Bank's holdings in companies such as HMM and Hanjin KAL. This is because it needs to recover tens of trillions of won in public funds to support key industries. Concerns have been raised in the market that the sale of the Development Bank's equity may add 'fuel to the fire' in the management dispute between Hoban Group and Hanjin KAL.
Hoban Group, the second-largest shareholder in Hanjin KAL, announced on the 12th of last month that it had acquired an additional 1.02% of the equity, raising the possibility of a management dispute. Currently, Cho Won-tae, the chairman of Hanjin Group, and related parties (including treasury shares) hold a 20.75% equity stake. When combined with the 14.90% equity classified as friendly holdings from Delta Air Lines and the 0.66% designated for the employee welfare fund, the chairman's effective stake totals 36.31%.
Hoban Group holds 18.46% of the equity in Hanjin KAL, and industry evaluations suggest that this is insufficient to wrest control from the chairman. However, if Hoban Group were to acquire all of the Development Bank's holdings, its stake could rise to 29.04%. From Hoban Group's perspective, this would be 'a fight worth having.'
If the Development Bank sells its equity in Hanjin KAL, it is likely to adopt a block deal (large-scale trading outside of regular trading hours) through a public bidding process. In this case, the highest bidder would acquire the equity. In terms of financial capacity, Hoban Group currently has the upper hand, with reports indicating that its cash holdings exceed 7 trillion won. In contrast, Hanjin Group appears to have limited cash available.
As signs of a management dispute emerge, the stock price of Hanjin KAL has surged, and it is estimated that the value of the Development Bank's holdings may reach at least 1 trillion won. The Development Bank's indication that it has no plans to sell its equity in the near future is expected to work in favor of Hanjin KAL.