This article was published on May 13, 2025, at 5:37 p.m. on the ChosunBiz MoneyMove site.
As Hoban Group has increased its stake in Hanjin KAL following LS, it has been revealed that preparations to expand its stake have been underway since the beginning of the year. Lee Myung-hee, a senior advisor at Jeongseok Corporation and the mother of Cho Won-tae, the chairman of Hanjin Group, has periodically sold her stake in Hanjin KAL, and it is reported that this advisor has explored the possibility of purchasing the stake she holds.
Hoban is also said to have contacted financial investors (FI) to increase its stake in Hanjin KAL(related article☞LS·Hanjin KAL, commonalities of two companies where Hoban made a surprise appearance as a shareholder). If a large holder of Hanjin KAL's equity sells their stake, Hoban could relatively easily secure a significant amount of equity.
Industry insiders interpret that the Korea Development Bank, which holds over 10% of Hanjin KAL's equity, is not necessarily a negative factor for Hoban. Since Korean Air is the only national carrier, the bank may continue to hold its equity, but there is also the possibility that it may sell to a third party, which could potentially reduce the chairman's white knight equity depending on who purchases it.
◇ Hoban Construction wanted to buy advisor Lee Myung-hee's stake... Company claims “it's not true.”
According to the investment banking (IB) industry on the 13th, Hoban and Hoban Hotels & Resorts disclosed that they bought 0.05% and 0.96% of Hanjin KAL's equity, respectively, through stock purchases on the market the previous day. Since Hoban Construction and Hoban Hotels & Resorts previously held 11.5% and 5.85%, this purchase increased Hoban's total equity stake to 18.46%.
The gap between Hoban's equity and that of the largest shareholder, Chairman Cho, which is 19.96%, has narrowed from the previous 2.5 percentage points to 1.5 percentage points. As Hoban is closely chasing the major shareholder, there is a possibility that a small variable could reverse the equity ratio. In other words, both Chairman Cho and Hoban are in a situation where they need every fraction of a percent.
Hoban Group maintains that it bought the equity for simple investment purposes, but it has been confirmed that they have been contemplating scenarios for a management dispute since early March.
What Hoban Group is hoping for is the stake held by this advisor, who currently has 2.09% of Hanjin KAL's equity. Last year, in August and September, she disposed of 367,535 shares through a block deal (off-exchange large-scale transaction), reducing her stake from 2.68% to 2.09%. It remains unknown to whom she sold.
There are also rumors that the stake held by the chairman's maternal family has been sold to someone through a block deal, but since the chairman's maternal family is not tied as a related party of the largest shareholder, the status of their equity holding and disposal has not been confirmed.
In response, Hoban Construction claims this is not true. A spokesperson for Hoban Construction refuted, saying, “If we were to secure equity from the chairman's family, why would we have steadily purchased shares on the market since March of last year?”
It is unlikely that this advisor will sell her shares to Hoban to shake up her son's management. The mother, advisor Lee, seemed to support her daughter, Cho Hyun-min (formerly Jo Hyun-ah), who began a management dispute with her son, Chairman Cho, back in 2019. After Cho Hyun-min allied with private equity firm KCGI, she issued a statement supporting Chairman Cho. Currently, both the advisor and her daughter, President Cho Hyun-min of Hanjin, have agreed to 'joint exercise of voting rights' with Chairman Cho.
◇ Will the bank's 10.6% equity come onto the market… If so, who will buy it?
The fact that Korea Development Bank is a major shareholder in Hanjin KAL is also one of the variables.
Korea Development Bank provided capital to help Hanjin KAL during Korean Air's acquisition of Asiana Airlines in 2020. Money was needed at Hanjin KAL, and there was intense management conflict with the KCGI-Bando Construction-Cho Hyun-ah 'trio'; therefore, there was a need to stabilize Chairman Cho's management rights. Accordingly, Korea Development Bank invested 500 billion won through a third-party allocation of a capital increase, securing 10.6% equity and effectively joining as an ally with a contract to jointly hold equity with Chairman Cho.
No one can guarantee when and how Korea Development Bank will dispose of its 10.6% equity. Some have speculated that the bank may hold that equity on a semi-permanent basis. Since Korean Air is the only national carrier in the country, there is justification for continuing to hold the equity.
In the past, a senior official from the bank stated, “There are many cases internationally where national banks or governments hold equity in national carriers.”
In fact, the Dutch government holds 9.3% of the equity in Air France-KLM Group, the parent company of its representative airline KLM. The Italian government established the public airline ITA Airways to replace Alitalia, which went bankrupt in 2020, and holds 59% of its equity.
On the other hand, some industry insiders predict that it is a principle for government policy finance institutions like Korea Development Bank to eventually unwind their investments in private corporations, and anticipate that the bank will sell its equity at an appropriate time after the merger of Korean Air and Asiana Airlines.
An industry insider noted, “In this case, who Korea Development Bank sells its equity to will be important, but as long as Hoban has a strong position as the second-largest shareholder, it will be difficult for a new strategic investor (SI) to enter. Financial investors (FI) may consider holding the equity and reselling it at a high price to Chairman Cho or Hoban.”
◇ Cho Won-tae's personal equity is only 5.78%... Delta's 14.9% serves as a white knight.
According to the Financial Supervisory Service's electronic disclosure, Chairman Cho has borrowed 70.5 billion won against his holdings of 2,075,000 shares. Due to having to provide more than half of his holdings as collateral, he is in a situation where it is not easy to secure additional equity.
Chairman Cho personally holds only 5.78% of the equity. The 'largest shareholder and related parties' equity of 19.96% includes this advisor (2.09%), his older brother, Cho Won-tae's advocate during the management dispute, Cho Hyun-min (5.73%), Jeongseok Inha Foundation (1.9%), Ilwoo Foundation (0.14%), Jeongseok Logistics Academic Foundation (0.95%), and Korean Air employee self-insurance (2.27%), Korean Air employee association (1.09%).
However, within the industry, the view is predominant that Delta Airlines' 14.9% equity is also seen as a reliable support for Chairman Cho. If one considers Delta Airlines and Korea Development Bank effectively as Chairman Cho's white knights, the combined equity for Chairman Cho and his allies is approaching a total of 45.55%.