Cargo Business Newswire

Thursday, June 12, 2014

Korean Air to become top shareholder of Hanjin Shipping

Korean Air Lines will become the largest shareholder of Hanjin Shipping in mid June, giving its parent group access to comprehensive logistics services, according to company officials.

Sources at Korean Air and Hanjin Shipping said the transaction would be achieved through a capital increase via a third-party allocation arrangement that was approved by the boards of both companies early Tuesday.

Under the deal, Hanjin Shipping will undergo a capital increase of $393.6 million with the airline taking part in the purchase.

"Korean Air will acquire more than 74.07 million shares in the shipping line on June 17, which will give it a 33.2 percent stake in that company," an insider at the airline said.

This will give it control over Hanjin Shipping, potentially allowing both companies to become more competitive in the global logistics arena.

Hanjin has been struggling with the global industry slowdown, as well tougher competition and poor management decisions that include the untimely purchase of new vessels. Company CEO Choi Eun-young stepped down in April to be replaced by Cho Yang-ho, who is president of Korean Air and the larger Hanjin Group.

For more of the Global Post story: globalpost.com