The stock price of Hanjin KAL Corp., the holding company of Hanjin Group, continues to rise despite the recent crash of the South Korean stock market. Some say this might be a signal that another round of ownership battle has begun between Hanjin Group and the Korea Corporate Governance Improvement Fund (KCGI).
Hanjin KAL shares rose 1,000 won (US$0.82), or 3.5 percent, to close at 29,550 won (US$24.31) on Aug. 7. The company’s stock price continued to increase from the beginning of this month to post a gain of 14.09 percent compared to the end of last month. The figure compares with the 5.67 percent drop in the KOSPI index over the same period.
As a company’s share price usually goes up when there is a control dispute, the recent rise of the Hanjin KAL stock price is seen as suggesting a renewed conflict between KCGI and Hanjin Group over the control of Hanjin KAL.
In particular, Delta Air Lines Inc., which is considered a “white knight” for Hanjin Group, has reportedly continued to buy Hanjin KAL shares, regardless of the stock market plunge. The U.S. airline announced on Aug. 1 that it has acquired an additional 3,038,000 shares of Hanjin KAL and increased its stake to 5.13 percent. In June, Delta Air Lines said it purchased a 4.3 percent stake in Hanjin KAL, and it would eventually increase its stake in the firm to 10 percent. It net bought 457,907 shares of Hanjin KAL through Goldman Sachs from Aug. 1 to 6 and another 125,000 shares on Aug. 7.
In this regard, the KCGI is reportedly stepping up its counterattack. It is worth noting that the amount of daily net purchases of Hanjin KAL by “other corporation” among investors ranged from several billions won to 12 billion won (US$9.89 million) from the beginning of this month. The total number of net purchases alone was 1,409,035 shares worth 39.50 billion won (US$32.55 million) over the same period. This suggests that the KCGI, which currently holds 9,457,252 shares of Hanjin KAL with a 15.98 percent stake, is amassing the firm’s shares again through its special purpose company (SPC). Foreign investors which went on buying spree until last month recently locked in profits little by little and net sold 3.40 billion won (US$2.80 million) worth of the shares on Aug. 7, but “other corporation” purchased 7.50 billion won (US$6.18 million) on the same day, pushing up the stock price.