Delta purchases 4.3 percent of Hanjin-Kal’s shares

U.S. airliner Delta Air Lines bought shares of Hanjin-KAL, a major shareholder of Korean Air, becoming a threat to Korean Air Chairman Cho Won-tae’s stable management. Korean-grown private equity fund KCGI increased the share of Hanjin-Kal, which has raised chances of conflict with Chairman Cho over corporate management.

Delta Air Lines released its holding of 4.3 percent of Hanjin-Kal’s shares on Friday, announcing to raise the figure to 10 percent upon approval of regulatory authorities. As one of the largest U.S. flight carriers, it has been in an amicable and cooperative relationship with Korean Air since the late chairman Cho Yang-ho led the company.

Hanjin-Kal is a holding company in the highest tier of Hanjin Group’s governance structure. Chairman Cho and his affiliate persons hold 28.93 percent of Hanjin-Kal. KCGI has recently raised its share to 15.98 percent. If the shares of Korean Air held by Delta work in favor of Chairman Cho, the Cho-favored figure goes up to 33.23 percent, doubling that of KCGI.

The airline industry considers that Delta would not have a say in a way that can shake up Cho even though the airliner has not declared that the shares favor him. KCGI said in a statement on Friday that it is welcoming that Delta decided to invest in Hanjin-Kal acknowledging long-term growth potential, adding that it proposes joint monitoring and check of the company.


Do-Hyong Kim dodo@donga.com