Hanjin clears last hurdle in makeover

Hanjin Group took its last step to become a holding company when Hanjin Transportation sold its stake in Korean Air on Thursday.

According to the company, Hanjin Transportation sold its entire 8 percent stake in Korean Air, nearly 5.8 million shares, in an off-market block trade. The sale was valued at 216.9 billion won ($189 million). The shares were priced at 37,700 won, a 4.4 percent discount from Wednesday’s closing price of 39,450 won. The share value of the company was unchanged on Thursday.

Hanjin Transportation earlier tried to sell off the shares on July 8 but didn’t as the Korean stock market was affected by the significant drop in the Chinese stock market.

The sale rid the transportation company of horizontal holdings in Korean Air, which is illegal under a holding company structure here.

The earlier structure, loaded with cross-holdings, tied Hanjin Transportation in a daisy chain between Hanjin Kal, Jungseok Enterprise and Hanjin Transportation.

In the new structure, Cho Yang-ho, Hanjin’s chairman, and his family will control the holding company, Hanjin Kal, with Jungseok Enterprise, Korean Air and Hanjin Transportation under it.

Hanjin Group’s new structure will force it to either buy 100 percent of eight smaller affiliates, including Hanjin Shipping, or sell all its current holdings by November 2016.

Hanjin Group began revising its governance structure in August 2013 when it split Hanjin Kal and Korean Air.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]