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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] Executives at Hanjin, including President Cho Hyun-min (Emily Cho), are set to acquire convertible bonds that can be exchanged for company shares—raising concerns over possible preferential treatment that may exclude minority shareholders.
On July 8, Hanjin’s board of directors approved a motion titled "Designation of Buyers for Put Option Related to Convertible Bonds," enabling certain executives to exercise call options attached to a portion of the company’s convertible bonds originally issued to Eugene Investment & Securities in July 2023.
The 30 billion KRW worth of convertible bonds issued in 2023 allow the bondholder to convert them into Hanjin shares at a fixed price of 19,170 KRW per share between July 24, 2024 and June 24, 2028. If the market price exceeds this conversion price during the period, bondholders can convert and profit from the difference.
Under a call option clause included in the original issuance agreement, Hanjin retained the right to designate a third party to purchase up to 27.51% of the convertible bonds. Hanjin has now exercised this right, naming internal executives—including President Cho, CEO Noh Sam-seok, Hanjin KAL Vice Chairman Ryu Kyung-pyo, Head of Corporate Strategy Kim Hyun-woo, and Head of Financial Management Seo Min-seok—as buyers.
The executives are reportedly acquiring the bonds with an annual interest rate of around 1%, a relatively low rate compared to market conditions. Critics argue this effectively grants top management the right to acquire shares at a significant discount compared to current market prices, potentially at the expense of minority shareholders.
In a regulatory filing, Hanjin stated that the transaction is aimed at "securing stable management control." However, as of March 2024, Hanjin’s shareholder structure includes Hanjin KAL with a 30.78% stake, Chairman Cho Won-tae with 0.03%, and President Cho Hyun-min with 0.13%, suggesting that there may be no immediate threat to management stability.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
