Court ruling is forthcoming on the direction of Asiana Airlines … 産 銀 · KCGI position by number

KCGI “Third Party Assignment Bequest Infringement Guaranteed By Cho Won-Tae Management Rights”

The mountain “will be nowhere … no alternative”

The Hanjin Group’s fundraising method for the Asiana Airlines acquisition is illegal and the result of an interim injunction filed by the private equity fund KCGI in court is expected to come out earlier this week. According to industry sources on the 30th, the 50th Civil Settlement Division of the Seoul Central District Court (Judge Lee Seung-ryun), who was responsible for the interrogation, was the issue of the case on the 25th, when the date of the ‘interrogation. He raised his back. If the court accepts the interim injunction request, Hanjin Group’s acquisition of Asiana Airlines will be virtually impossible.

As for the issue of the matter, KCGI and the Korea Development Bank and Hanjin Kal are in close comparison. KCGI argues that Hanjin Kal’s plan to finance the acquisition by assigning new shares of Hanjin Kal to KCGI is the primary purpose of defending the management rights of Hanjin Cho Won-tae chairman. KCGI and other shareholders are said to have to raise funds through a shareholder allocation method so they can participate in the capital increase. If the company chooses a paid capital increase by allocation to a third party (Saneun) as promoted by Sangeun and Hanjin Kal, KDB will acquire a 10.66% stake in Hanjin Kal, which effectively owns a casting boat in dispute over the management rights.

KCGI also said: “It is the legal nature of this case that the management of the company in the midst of a dispute over management rights completely excludes shareholders and has the right to arbitrarily decide this important decision.” To insist.

The position is that there are many other alternatives to raise funds for the Asiana Airlines acquisition. KCGI previously stated: “If Hanjin Group and KDB have sincerity and willingness to reorganize the aviation industry, it is possible to acquire Asiana Airlines by issuing preferred stock or non-voting loans in the current structure.” KCGI points out that even if the issuance of new shares allotted to a third party is canceled due to the results of the interim arrangement, the merger of the two largest airlines can be promoted into other forms to reorganize the aviation industry.

KDB and Hanjin Kal argue that a paid-up capital increase assigned to a third party is inevitable through the input of KDB funds. It is logical that the Bank should participate as a shareholder directly through the investment of Hanjin Kal’s ordinary shares, accompanied by voting rights, to faithfully play the role of monitor of sound and ethical management. KDB said that President Cho has provided all of Hanjin Kal’s stock as collateral for violations of the investment agreement and has decided to withdraw from the front if management’s performance is insufficient.

He also points out that the investment in Hanjin Kal, a “control tower”, is the best alternative to successfully complete the restructuring of the aviation industry. In addition to the integration of the two major domestic airlines, the low cost airlines (LCCs) and their subsidiaries were reorganized, so they had no choice but to invest money in Hanjin Kal, not Korean Air.

KCGI rejects the claim that other alternatives exist as an irresponsible claim that has no possibility of realization. First of all, the request for a capital increase paid to shareholders by KCGI takes more than two months and is not a viable option given the situation of Asiana Airlines, which requires emergency funds by the end of the year. He argues that additional debt burdens, such as issuing bonds and loans, are also an unrealistic alternative that does not take into account the burden of repaying principal and interest. Hanjin Group criticized in the previous position, “the alternative proposed by KCGI is not feasible” and that “KCGI CEO Kang Seong-bu should not claim that there is an alternative only in words, but should take responsibility for his words. “.

KCGI is also confronting the fact that this support plan is to defend the management rights of President Cho Won-tae. Previously, Sangeun had announced his position that he would not exercise amicable voting rights on either party. By securing a stake in Hanjin Kal, he drew a line on suspicion that he would play President Cho’s “white knight”. The KDB explained that “the exercise of voting rights will be carried out through an organization in which private members participate for fair and transparent decision-making”.

Earlier, on the 18th, KCGI requested an interim injunction to ban the issuance of new shares, saying: “In connection with Hanjin Group’s acquisition of Asiana Airlines, which was hastily decided, the board of directors of Hanjin Kal has decided to issue a paid capital increase to a third party which significantly changes the current quota structure. ” . Considering the new share issue program, the results of the provisional arrangement are expected to be published by the 1st of next month at the latest.
/ Reporter Park Hanshin [email protected]