Hanjin chair raises stake in Korean Air parent amid Hoban buildup

Hanjin Group Chair Walter Cho is tightening his grip on Hanjin KAL, the holding company of Korean Air, with fresh share purchases just as its second-largest shareholder, Hoban Group, has notified regulators that it may now hold the top stake.

In a regulatory filing Monday, Hanjin KAL disclosed that Cho had agreed to buy 325,000 of its shares for 37 billion won ($28 million) via block trade between Dec. 3 and Jan. 1, citing a goal to strengthen responsible management.

Once complete, the deal will lift Cho’s stake by 0.48 percentage point to 6.23 percent, bringing the combined holdings of Cho and related parties to 21.06 percent from 20.57 percent.

The move follows Hoban’s filing of a business combination report with the Fair Trade Commission last month, after further open-market purchases led the construction group to judge that it may now outrank the Cho camp. Hoban last disclosed a 20.15 percent stake in July, just 0.42 percentage point below the Cho camp’s holding.

The FTC typically reviews such filings within 30 days, but may extend the process by up to 90 days. Hoban underwent a similar review in 2022, when its stake first crossed the 15 percent threshold.

Despite the timing, Hanjin KAL denied that Cho’s purchase was linked to Hoban’s buying. "We understand this was prepared well in advance," a Hanjin KAL official said. "It has nothing to do with Hoban’s recent moves."

In a separate filing, the company pledged to issue an update within a month, sooner if details on its largest shareholder are confirmed.

Hoban likewise insists its interest is purely financial. "Participation in management has never been discussed," a Hoban Group official stated. "We acquired the stake simply as an investment."

Hoban became Hanjin KAL’s second-largest shareholder in 2022 by buying out private equity fund KCGI, a former rival of Cho’s, then added 5.85 percent from Pan Ocean a year later. In 2015, it bid for Kumho Industrial, then Asiana’s parent, but talks collapsed over price.

Even if Hoban has taken the top spot, control will not change hands overnight, industry officials note.

Cho can count on Delta Air Lines, Korean Air’s joint-venture partner, with 14.9 percent, and the state-run Korea Development Bank, which backed the Asiana acquisition, with 10.58 percent. Together with his camp, they hold more than 46 percent. LX Pantos, GS Retail and Japan Airlines are also seen as friendly.

Although the bank’s stake looms over the contest, since KDB could seek to recoup its investment once the airline integrations wrap up, investment bankers see little chance it would turn against Cho.

"Hanjin has worked closely with KDB through years of restructuring and the Asiana merger," one industry official said. "Unless Hanjin causes serious trouble, KDB is unlikely to take sides in a control fight."

The first real test comes at Hanjin KAL’s shareholders meeting in March 2027, when Hoban, still without a board seat, could nominate independent directors. The holding company owns 26.13 percent of Korean Air, which merges with Asiana in December. Its budget carriers are set to combine the same month as the meeting.