Shares of Hanjin KAL, the holding company of Hanjin Group, continued to extend losses on June 24 as investors who bet on the firm’s escalating battle with a local activist fund are offloading them, analysts said.
Investors are selling shares of Hanjin KAL, the parent company of Korean Air, as the battle with the Korea Corporate Governance Improvement seems to be over. KCGI’s 16 percent stake in Hanjin KAL could serve as an overhang, they said.
“Hanjin KAL shares may undergo a further correction as investors may think the stocks held by KCGI as potential ones to be sold anytime in the market. It may fall further to 25,000 won ($22) in the coming weeks,” Choi Nam-kon, an analyst at Yuanta Securities Korea, said in his research note.
The shares fell 9.3 to close at 31,100 won, after sliding to as low as 30,900 won and Korean Air declined 0.7 percent to 30,300 won, underperforming the broader Kospi’s 0.03 percent gain.
In a session earlier, Hanjin KAL plunged 15 percent and Korean Air shed 2.6 percent as Delta Air announced that it has acquired a 4.3 percent stake in Hanjin KAL and said it intends to jack up its investment in the firm to 10 percent over time.
Delta’s unexpected investment in Hanjin KAL, which owns a 30 percent stake in Korean Air, has cleared uncertainties surrounding its battle to defend its management rights against any attacks of activist hedge funds, such as KCGI.
By Ram Garikipati and newswires (email@example.com)