South Korea’s activist private equity fund Korea Corporate Governance Improvement (KCGI) has offered to buy all Hanjin KAL, parent company of Korean Air Lines, shares held by Delta Air Lines a month ago, but no progress has been made yet.

Shares owned by Delta were initially considered as the key to a proxy battle that would determine the fate of the owner family including Hanjin KAL Chairman Cho Won-tae. But, as the three-party coalition has expanded its stake in Hanjin KAL, the strategic value the shares carry has been weakened.

The three-party coalition consisting of KCGI plans to continuously purchase Hanjin KAL shares in the market, investment banking (IB) industry sources said on April 21. Grace Holdings, a subsidiary of KCGI, said in a regulatory filing on April 1 the three-party coalition’s stake in Hanjin KAL has increased to 42.75 percent. The coalition reportedly aims to further increase its stake.

Cho now has a combined mid-41 percent stake in his favor while the coalition owns a little more than that. “KCGI is monitoring the stock movement, thinking it can surpass Cho’s stake by purchasing shares in the market,” said an IB industry source. The sources added that KCGI has sold its shares of Hanjin and secured funds in order to buy more shares of Hanjin KAL.

KCGI initially planned to purchase all the South Korean airliner’s shares held by Delta, aiming to raise the stakes ahead of the extraordinary general meeting. Delta recently struck a deal with the U.S. Treasury Department on a rescue package worth billions of dollars. The airliner will get $5.4 billion in aid, including $1.6 billion in a 10-year loan.

Market insiders believed that Delta will urgently put its stake in Hanjin KAL up for sale to secure liquidity, but the U.S. carrier hasn’t responded to KCGI’s offer. It is said that two parties haven’t made any progress yet. KGCI is said to alter its strategy to buy shares in the market due to the lack of any responses from Delta and doubts over the completion of the deal.

What is notable is that the stake held by Delta is losing its strategic value. The stake held by the U.S.-based airliner is still important to Cho, but it is losing attraction to the three-party coalition, whose stake ownership already has exceeded that of Cho.

Amid an increasing sense of crisis that Korean Air’s enterprise value may decline with the airliner mulling a rights offering, it still has to be seen whether Hanjin KAL stock price will be able to stay at the current level. Market observers believe Delta may face less and less opportunity to exit its investment in Hanjin KAL, given the volatile stock price due to a decrease in the number of floating stocks.

Industry insiders expect that the timing of Delta putting its stake in foreign airliners including Hanjin KAL will be determined by the effect of the government bailout. (By reporter Choi Ik-hwan)