[Market Focus] Hanjin KAL Hits Upper Limit for Second Day as Hoban Construction Increases Stake

Hoban Construction's additional purchase of shares in Hanjin Group's holding company, Hanjin KAL, has sent Hanjin KAL's stock price to the upper limit for two consecutive days. The acquisition by Hoban has also raised the possibility of a management rights dispute between the two companies.

On the morning of May 13, immediately after the market opened, Hanjin KAL was trading at 150,600 won, up 34,700 won (29.94%) from the previous trading day. Hanjin KAL preferred shares were also up 8,900 won (29.97%) at 38,600 won.

On May 12, Hoban Construction, the second-largest shareholder of Hanjin KAL, announced that it had further increased its stake in Hanjin KAL (including special related parties) from 17.44% to 18.46%. Hanjin KAL's stock price surged 29.93% to close at 115,900 won the following day, hitting the upper limit. Hanjin KAL preferred shares also soared 29.98% to 29,700 won, reaching the upper limit as well.

Currently, Hanjin Group Chairman Cho Wonjin and his special related parties hold a 30.54% stake in Hanjin KAL. Excluding the Korea Development Bank's 10.58% stake, the gap between Hoban Construction and Chairman Cho's group is 1.5 percentage points.

While Hoban Construction has stated that its share purchase is for simple investment purposes, there are also projections that a management rights dispute between the two sides could occur. Hoban Construction became the second-largest shareholder of Hanjin KAL in 2022 and further narrowed the gap with Chairman Cho by acquiring an additional 5.85% stake the following year.