Conglomerates selling stakes in money-making affiliates to raise funds

[THE INVESTOR] Owners of the nation’s top conglomerates are increasingly selling their stakes in various money-making affiliates to raise funds needed for participating in capital increases of other key affiliates.

On June 8, Hanjin Group chairman Cho Yang-ho sold a 6.87 percent stake in one of Hanjin’s real estate brokering affiliates for 25.1 billion won (US$21.3 million), according to a regulatory filing on June 16. The brokering affiliate had posted 41.3 billion won in sales and 14 billion won of operating profit. 

Cho is currently planning to take part in a 90.8 billion won capital increase for Hanjin KAL, the holding company of Hanjin Group.

Lee Woong-yeul, chairman of Kolon Group also sold off a 5.8 billion won worth stake in Kolon Glotech, and 20.6 billion won in Hana Capital. Lee used 8.4 billion won of the proceeds increase the capital of Kolon Life Science. Chey Chang-won, vice chairman of SK Chemicals, sold his entire stake in SK Engineering & Construction worth 51.7 billion won in April. 

Chey is currently working to maintain the 17 percent stake he helped secure in SK Chemicals by taking part in a capital increase at the end of 2015.

In February, Samsung Electronics vice chairman Lee Jae-yong sold 381.8 billion won worth of stake in Samsung SDS to fund a capital increase for Samsung Engineering.

By Kim Ji-hyun (jemmie@heraldcorp.com)