Hanjin Sells Its Entire Stake in Korean Air

Hanjin Transportation Co., the overland transportation and delivery unit of the Hanjin Group, sold its entire stake in Korean Air Lines. Accordingly, the Hanjin Group only has eight subsidiaries, including Hanjin Shipping, to sell in order to become a holding company.

The Hanjin Group announced on July 16 that Hanjin Transportation sold its entire 7.95 percent stake in Korean Air, a total of 5,792,627 shares, in an off-market block trade.

The shares were priced at 37,700 won (US$32.85), a 4.4 percent discount from the closing price of 39,450 won (US$34.47) on July 15. Accordingly, Hanjin Transportation has now secured 216.9 billion won (US$189 million) in cash.

As Hanjin Transportation sold its entire stake in Korean Air, the Hanjin Group took its last step to become a holding company. The group established Hanjin KAL, which is in charge of the investment business, through a horizontal spin-off of Korean Air, which is in charge of the air transportation business, converting it into a holding company system, and thereby creating the Group’s corporate governance system, on Aug. 1 2013.

With Hanjin Transportation’s disposal of Korean Air stakes, Hanjin needs to sell stakes of its eight smaller affiliates, including Hanjin Shipping, in a bid to become a complete holding company by Nov. 10, 2016, which is two years after Korean Air became Hanjin KAL’s subsidiary on Nov. 11, 2014. This is to meet the stake requirements of 100 percent to become a parent company.