Hana Tour is spreading its wings overseas again. It has shifted from a strategy of liquidating many overseas subsidiaries during the COVID-19 pandemic to establishing new overseas branches. This decision comes as the company concluded that the market is too small to only focus on outbound travel for domestic customers or inbound travel for foreign tourists. Private equity firm IMM Private Equity, which owns 27.7% of Hana Tour, selected Citigroup Global Markets Securities as the sales advisor in May and is preparing for the sale.
According to the travel industry on the 12th, Hana Tour has confirmed that it has reestablished its Singapore subsidiary, which was liquidated in 2022, just one year after its liquidation in 2023. Additionally, there are plans to establish more overseas subsidiaries in Hong Kong or Singapore by March next year.
A Hana Tour official noted, "The new subsidiaries will actively seek partnerships and investments with local travel companies," adding, "We plan to focus on discovering new products and content locally."
This contrasts sharply with what Hana Tour has shown since 2020. The company had drastically reduced its overseas subsidiaries due to the impact of the COVID-19 pandemic. In 2022, it liquidated branches in Rome, Italy; Sydney, Australia; and Cambodia, Singapore. There were also plans to liquidate branches in Fukuoka, Japan; Eschborn, Germany; Zhangjiajie, China; and Taipei, Taiwan. This was because tourism came to a halt, forcing survival to be the priority. Liquidating subsidiaries helps reduce fixed costs such as local facility and labor expenses.
However, recently, Hana Tour is dreaming of a 'global bound' again. Global bound refers to foreign tourists traveling not only to Korea but also to Japan, Europe, and Southeast Asia. This decision is based on the judgment that the market is too small to focus solely on outbound travel for domestic customers and inbound travel for foreigners.
Hana Tour's attempts to soar as a global bound travel agency have been longstanding. It is also a dream of founder Park Sang-hwan. To achieve this, Hana Tour began establishing 100% wholly-owned overseas subsidiaries in 2005. The first was the Singapore subsidiary, established with an investment of 1.2 billion won at the time. Until then, it had been pursuing joint ventures with local companies.
An official from the travel industry remarked, "This suggests that the direction of the business that Hana Tour attempted at that time was correct," adding, "Although the owner has changed to IMM and will soon welcome a new owner, it appears that the company is moving in a direction to enhance its corporate value as a travel agency."
Hana Tour's largest shareholder is IMM Private Equity, which holds a 16.68% equity stake through a special purpose company. IMM Private Equity plans to sell 27.7% of its equity, including the stakes of related parties such as Park Sang-hwan, chairman of Hana Tour (6.53%), and Vice Chairman Kwon Hee-seok (4.48%). IMM Private Equity acquired a 16.67% equity stake in Hana Tour in 2020, investing 128.9 billion won through a third-party allocation capital increase, becoming the largest shareholder. At that time, the new stock issuance price was 55,000 won.
As of the closing price on the 11th, Hana Tour's market capitalization is approximately 900 billion won, and the pure market value of the 27.7% equity stake is about 270 billion won. Adding a management premium of 20-30%, the sale price would start at a minimum of around 330 billion won.