This article was published on May 28, 2025, at 4:28 p.m. on the ChosunBiz MoneyMove website.
Amid a market release of around 550 billion won in Hanjin KAL equity held in a private equity fund this August, Hyundai Motor was reported to hold nearly 30% of that fund's equity. Hanjin KAL is the holding company of Hanjin Group, which owns Korean Air. Industry watchers predict that the equity may go towards LS.
According to the investment banking (IB) industry on the 28th, the 'Daishin Core Growth General Private Investment Trust (Hanjin KAL PEF investment)' fund is approaching its expiration at the end of August. This fund was created when the Bando Group retreated after intervening in Hanjin Group's management dispute three years ago and began to liquidate its equity.
Three years ago, the Bando Group divested 16.1% of Hanjin KAL's common stock in August, with some of it acquired by major corporations in a club deal. The fund's shareholders include ▲SK Energy (84 billion won), ▲Hyundai Motor (60 billion won), ▲Kia (40 billion won), ▲Hyosung (20 billion won), and ▲Samkoo I&C (10 billion won).
The fund is estimated to hold around 5% of Hanjin KAL's equity. Due to the surge in Hanjin KAL's stock price, the total fund value, which was 214 billion won at the time of acquisition, amounted to 550 billion won as of this day.
There are suggestions in the industry that some of the Hanjin KAL equity held in the fund may flow to LS. This is not only because LS is facing a common adversary in their competition with Korean Air and Hoban Group, but also due to recent criticisms that Korean Air is undermining shareholder value as it purchased exchange bonds (EBs) issued by LS.
On the 16th, Korean Air bought EB worth 65 billion won, which is issued with its own stock as the underlying asset. The face interest rate of this EB is 0%, with a maturity interest rate of only 2%, leading to speculations that LS will take rewarding actions towards Korean Air.
An IB industry source noted, 'While various possibilities such as maturity extension, in-kind distribution, and equity transactions among fund investors (LPs) are open, the intentions of LPs like Hyundai Motor and SK seem to be crucial,' and added, 'It cannot be ruled out that it might go to LS.'
The representative from Daishin Asset Management, which manages the fund, said, 'As a private equity fund, there are parts we cannot comment on.' A representative from LS dismissed the remarks as 'the first I have heard of it.'
◇ LS builds an 'anti-Hoban' alliance with Korean Air
Taihan Cable & Solution, the parent company of LS Cable & System's biggest competitor, Korean Electric Wire, is under police investigation related to alleged leakage of LS Cable & System's underwater cable technology. Recently, a patent infringement lawsuit between the two companies over duct joint kits was confirmed with LS Cable & System’s final victory.
Recently, it was revealed that the Hoban Group acquired about 3% of LS's equity. Shareholders owning over 3% of the issued shares can demand access to the accounting books, copies, and request a shareholders' meeting, which could be interpreted as preparation for legal action against corporations or management.
The three affiliates of Hoban Group, including Hoban Construction, Hoban, and Hoban Hotel & Resort, increased their stake in Hanjin KAL from the previous 17.44% to 18.46% this month. Comparing to the chairman's and related parties' combined equity in Hanjin KAL, which stood at 20.13% at the end of the first quarter, the difference is only 1.67 percentage points.
However, since KDB Industrial Bank, bound by investment contracts with Hanjin KAL, and American Delta Airlines, classified as shareholders of Chairman Cho, have equity ratios of 10.58% and 14.90%, respectively, the likelihood of management control being threatened seems limited.
As the possibility of a management dispute intensifies, Hanjin KAL's stock price has surged. After being around 80,000 won earlier this month, Hanjin KAL’s stock price soared to 165,000 won during the trading session on this day. The closing price increased by 11.48% to 150,500 won compared to the previous trading day.