SEOUL. Atlanta-based Delta Air Lines has purchased a stake in Korean Air’s parent company, helping shore up the family that owns the firm against the building threat from activist shareholders.

Delta acquired a 4.3% stake in Hanjin KAL, it said on Thursday, adding that it could increase the position to 10 per cent “after receiving regulatory approval”.

The stake acquisition comes a year after the two airlines launched a joint venture, providing access to nearly 300 destinations in the US and 80 spots in Asia.

It is a boost for Hanjin KAL’s new chairman Walter Cho and will help the airline “defend its management rights against any attacks of activist hedge funds”, a Korean Air official was quoted as saying by South Korean’s Yonhap News Agency.

They include the Korea Corporate Governance Improvement (KCGI) fund that owns a nearly 16-percent stake in the company and is demanding larger returns and more transparency.

In April, Cho took control of Hanjin KAL from his father Cho Yang-ho, who was kicked off the board by shareholders backed by activist funds just days before he died.

The acquisition sent shares in Hanjin KAL tumbling 15 per cent Friday. Shares in Korean Air, South Korea’s flag carrier, also dropped 2.6 per cent. </s> Atlanta-based Delta Air Lines has purchased a stake in Korean Air's parent company, helping shore up the family that owns the firm against the building threat from activist shareholders

Seoul, (UrduPoint / Pakistan Point News - APP - 21st Jun, 2019 ) :Atlanta-based Delta Air Lines has purchased a stake in Korean Air's parent company, helping shore up the family that owns the firm against the building threat from activist shareholders.

Delta acquired a 4.3% stake in Hanjin KAL it said Thursday, adding that it could increase the position to 10 percent "after receiving regulatory approval".

The stake acquisition comes a year after the two airlines launched a joint venture, providing access to nearly 300 destinations in the US and 80 spots in Asia.

It is a boost for Hanjin KAL's new chairman Walter Cho and will help the airline "defend its management rights against any attacks of activist hedge funds", a Korean Air official was quoted as saying by South Korean's Yonhap news Agency.

They include the Korea Corporate Governance Improvement (KCGI) fund that owns a nearly 16-percent stake in the company and is demanding larger returns and more transparency.

In April, Cho took control of Hanjin KAL from his father Cho Yang-ho, who was kicked off the board by shareholders backed by activist funds just days before he died.

The acquisition sent shares in Hanjin KAL tumbling 15 percent Friday. Shares in Korean Air, South Korea's flag carrier, also dropped 2.6 percent. </s> Delta Air Lines’ move to purchase a stake in Korean Air's parent company is expected to strengthen the control of the Cho family over the company. Delta announced June 20 it had acquired a 4.3% share in Korean Air parent Hanjin KAL and intends to increase its stake to 10%. Korean Air believes “Delta acquired Hanjin KAL stakes to support our leadership,” the airline told ATW. The Cho family and its interests hold about 29% of Hanjin KAL, more than any other ... </s> (Reuters) - Delta Air Lines said on Thursday it plans to buy 4.3% stake in Korean Air’s parent company Hanjin Kal Corp.

Delta intends to raise its stake to 10% in the company over time, after receiving regulatory approval.

Reporting by Rachit Vats in Bengaluru; Editing by James Emmanuel </s> SEOUL/CHICAGO (Reuters) - Delta Air Lines bought a small stake in Korean Air Lines Co’s parent company and said it wants to increase it to 10%, giving a boost to the management of South Korea’s top carrier that seeks to thwart a local activist fund’s challenge.

Shares of the parent, Hanjin Kal Corp, tumbled 15 percent on Friday, as Delta’s move dashed investor hopes of a battle to control the family-run group that had driven up shares since the death of patriarch Cho Yang-ho in April.

Korean Air, which has a joint venture with Delta since last year, said on Friday it believes Delta’s 4.3 percent stake buy intends to ensure the ‘stable management” of the company and support for its leadership.

Should the No. 2 U.S. carrier raise its stake to 10% in Hanjin Kal, the airline’s founding family and its allies will have a total stake of 39%, versus the 16% stake held by the activist fund, Korea Corporate Governance Improvement (KCGI).

“Delta played a role as a white knight for Hanjin,” said Choi Nam-gon, an analyst at Yuanta Securities.

“Now it would be impossible for KCGI to take control of the group. The stake buy removes the chance of a management battle at Hanjin Group,” he said.

KCGI said in a statement that if Delta’s investment decision intends to “simply defend the management rights of the controlling family members, this would go against the honor and principles that it has built so far.”

It proposed Delta, backed by U.S. investor Warren Buffett, work together to eliminate inefficiencies and improve management transparency at the Hanjin Group.

Korean Air shares fell 2.6% and its budget affiliate Jin Air Co Ltd rose 0.2% in the wider market that was down 0.3%.

KOREAN AIR SUCCESSOR

Korean Air has been plagued in recent years by a series of scandals involving its founding family members.

In April, the tycoon suddenly died at age 70, just weeks after shareholders decided to end his 27-year tenure on the airline’s board, in a show of growing shareholder activism in Asia’s fourth-biggest economy that has long been dominated by family-owned conglomerates.

The group subsequently appointed his only son Walter Cho, 43, as CEO and chairman, but the company has yet to inform regulators about a definitive succession plan. He and his two sisters have small stakes in Hanjin Kal, in which the late Cho has a 17.8% stake.

Against that backdrop, KCGI raised its stake to nearly 16%, fueling speculation about an impending ownership battle at the conglomerate.

Delta Chief Executive Ed Bastian said earlier this month he had “a lot of confidence” in Walter Cho, noting their friendship had gone back 20 years.

“The investment demonstrates Delta’s commitment to the success of its joint venture with Korean Air,” Delta said in a statement. The venture includes 290 U.S. destinations and over 80 in Asia.

The U.S. airline did not disclose how much it paid for the 4.3% stake. It also did not say who it bought the stake from or when it may raise it to 10 percent.

FILE PHOTO: A Delta Air Lines flight is pushed put of its gate at the airport in Salt Lake City, Utah, U.S., January 12, 2018. REUTERS/Mike Blake/File Photo

Atlanta-based Delta has been growing internationally both through joint ventures - which allow airlines to coordinate fares and schedules while building a presence in new markets - and direct equity investments, which help airlines align their respective strategies.

Delta also owns stakes in Grupo Aeromexico, Air France KLM, China Eastern, Brazil’s Gol and Virgin Atlantic, and has been negotiating a stake in Alitalia.

Shares in Delta closed down 0.7% at $55.97 in New York on Thursday. </s> (Reuters) - Delta Air Lines said on Thursday it has acquired 4.3% stake in Korean Air Lines Co Ltd’s parent company Hanjin Kal Corp.

The No.2 U.S. airline also intends to raise its stake to 10% in the company over time, after receiving regulatory approval, the company said.

Ownership discussions with family members have been ongoing at Korean Air Lines and its majority-owned company Hanjin Kal after their patriarch’s sudden death in April raised questions about the future of the airline and its parent.

Hanjin Kal has been led by 43-year-old Walter Cho since the death of his father Cho Yang-ho, who was the former chairman. However, it has yet to inform regulators about the officials who are going to lead the group, which has diversified businesses including hotels, logistics and budget airlines.

Cho’s widow, two daughters and son hold stakes in Hanjin Kal.

The late tycoon died at the age of 70 following chronic illness, just weeks after shareholders decided to end his 27-year tenure on the airline’s board.

The change at the top comes soon after a local activist fund raised its stake in Hanjin Kal to nearly 16%, bringing the group’s ownership structure to wider attention. The Cho family has 17.8% stake in Hanjin, while its academic foundations own 29%.

Both Delta and Korean Air are members of the SkyTeam alliance and have a joint venture operating flights between Asia to the United States.

A spokesman at Korean Air, the flagship unit of Hanjin Kal, declined to comment. </s> CHICAGO/SEOUL (Reuters) - Delta Air Lines bought a 4.3% stake in Korean Air Lines Co’s parent company and said it wants to raise it to 10%, giving a boost to the management of South Korea’s top carrier that seeks to thwart a local activist fund’s challenge.

Shares of the parent, Hanjin Kal Corp, slumped 8% on Friday, as Delta’s move dashed investor expectations of a battle to control the family-run group that has driven up shares since the death of patriarch Cho Yang-ho in April.

Korean Air, which has a joint venture with Delta, said on Friday that the stake buy intends to ensure the ‘stable management” of the company and support its leadership.

Should the No. 2 U.S. carrier raise its stake to 10% in Hanjin Kal, the airline’s founding family and its allies will have a total stake of 39%, versus the 16% stake held by the activist fund, Korea Corporate Governance Improvement (KCGI).

“Delta played a role as a white knight for Hanjin,” Choi Nam-gon, an analyst at Yuanta Securities, said, noting that the share purchase was done despite the sharp share price rises of Hanjin Kal in recent months.

“Now it would be impossible for KCGI to take control of the group. The stake buy removes the chance of a management battle at Hanjin Group,” he said.

Korean Air shares fell 3% and its budget affiliate Jin Air Co Ltd slipped 0.7% in the wider market that was down 0.2% as of 0202 GMT.

In April, the tycoon suddenly died at age 70, just weeks after shareholders decided to end his 27-year tenure on the airline’s board, in a show of growing shareholder activism in Asia’s fourth-biggest economy that has long been dominated by family-owned conglomerates.

The group subsequently appointed his only son Walter Cho, 43, as CEO and chairman, but the company has yet to inform regulators about a definitive succession plan. He and his two sisters have small stakes in Hanjin Kal, in which the late Cho has a 17.8% stake.

Against that backdrop, KCGI raised its stake to nearly 16%, fueling speculation about an impending ownership battle at the conglomerate.

KCGI did not have immediate comments on Delta’s stake buy.

Delta Chief Executive Ed Bastian said earlier this month he had “a lot of confidence” in Walter Cho, noting their friendship had gone back 20 years.

Korean Air has been plagued in recent years by a series of scandals involving its founding family members. Cho’s eldest daughter, Heather Cho, made headlines in 2014 when she lost her temper over the way she was served nuts in first class and ordered the Korean Air plane to return to its gate at a New York airport.

In April 2018, Cho’s youngest daughter Emily Cho faced a storm of public criticism for allegedly throwing a drink at a business meeting attendee.

Both resigned from their senior positions at the airline in the wake of the scandals. The younger Cho recently returned to the group as an executive at Hanjin Kal.

Delta’s stake buy comes as the U.S. airline is expanding across Asia. It has said it sees Seoul’s Incheon International Airport, the hub of Korean Air, as a gateway for more destinations across the continent.

It did not disclose how much it paid for the 4.3% stake, worth about $88 million as of Thursday’s price. It also did not say who it bought the stake from or when it may raise it to 10 percent.

The two firms formed a joint venture last year that includes 290 U.S. destinations and over 80 in Asia. Atlanta-based Delta is growing internationally both through joint ventures - which allow airlines to coordinate fares and schedules while building a presence in new markets - and direct equity investments, which help airlines align their respective strategies.

Delta also owns stakes in Grupo Aeromexico, Air France KLM, China Eastern, Brazil’s Gol and Virgin Atlantic, and has been negotiating a stake in Alitalia.

Shares in Delta closed down 0.7% at $55.97 in New York on Thursday. </s> CHICAGO/SEOUL (Reuters) - Delta Air Lines Inc said on Thursday it had acquired a 4.3% stake in joint-venture partner Korean Air Lines Co Ltd’s parent company with a view toward expanding across Asia.

Atlanta-based Delta is growing internationally both through joint ventures - which allow airlines to coordinate fares and schedules while building a presence in new markets - and equity investments, which help airlines align their respective strategies.

The No. 2 U.S. carrier said it intended to increase its stake in Hanjin Kal Corp, which owns about 30% of Korean Air, to 10% over time, after receiving regulatory approval.

It did not disclose how much it paid for the 4.3% stake, worth about $88 million, according to current market prices.

Delta’s stake purchase was intended to ensure its partner’s “stable management rights”, Korean Air said in a statement.

Hanjin Kal shares fell as much as 7.1% on Friday. Korean Air fell 1.4 percent and its budget affiliate Jin Air Co Ltd rose 0.2 percent in the wider market that was down 0.2% as of 1225 GMT.

Delta has said it sees Seoul’s Incheon International Airport, the hub of Korean Air, as a gateway for more destinations across Asia.

The two airlines are members of the SkyTeam alliance and formed a joint venture last year that includes 290 U.S. destinations and over 80 in Asia. This year, Delta launched routes to Seoul and Osaka in partnership with Korean Air, Hanjin Kal’s flagship unit.

“Long term, the partnership and the joint venture is strong in terms of size and there’s no reason to think it can’t grow substantially into the future,” Delta Chief Executive Ed Bastian said at an aviation summit earlier this month in Seoul.

Delta also owns stakes in Grupo Aeromexico, Air France KLM, China Eastern, Brazil’s Gol and Virgin Atlantic, and has been negotiating a stake in Alitalia.

Delta’s investment follows the sudden death in April of Cho Yang-ho, the patriarch of Hanjin Kal and Korean Air, which raised questions about the future of both.

Since the death of his father, 43-year-old Walter Cho has led Korean Air as CEO and chairman, but the company has yet to inform regulators about a definitive succession plan.

The late tycoon died at age 70, just weeks after shareholders decided to end his 27-year tenure on the airline’s board. Cho’s widow, two daughters and Walter Cho all hold stakes in Hanjin Kal.

At the Seoul conference, Bastian said he had “a lot of confidence” in Walter Cho, noting their friendship had gone back 20 years.

Hanjin Kal’s ownership structure has come under scrutiny since a local activist fund raised its stake to nearly 16%. The Cho family and its academic foundations own 29%, including the late Cho’s 17.8% stake.

If Delta raises its stake to 10% in Hanjin Kal, with diversified businesses including hotels, logistics and budget airlines, it would become the third biggest shareholder.

Korean Air grows its own food for cabin meals and also owns hotels and a limousine service

Shares in Delta closed down 0.7% at $55.97 in New York on Thursday. </s> Delta bets on Korean Air, buys stake in its top shareholder

ATLANTA (AP) — Delta Air Lines says it's buying a 4.3% stake in Korean Air's largest shareholder to strengthen its joint venture with the Asian carrier.

Delta said Thursday it invested in Hanjin-KAL and plans to increase its equity stake to 10%. The investment needs regulatory approval.

Hanjin KAL owns 30% of Korean Air, according to FactSet.

Delta isn't saying how much it paid for the stock.

The two airlines launched a joint venture last year, selling seats on each other's flights and sharing the revenue. Delta CEO Ed Bastian says it's already one of his airline's most successful partnerships.

Both carriers belong to SkyTeam, one of three alliances among global airlines. Atlanta-based Delta is the second-biggest U.S. carrier by revenue, behind only American Airlines.
Korean Air confirms that US carrier Delta Air Lines has acquired a 4.3% stake in Korean Air's parent company Hanjin Kal, which may help Hanjin resist pressure from an activist shareholder.