Price expected to approach $2 billion
Four players stage fierce competition to gobble up Asiana Airlines, Korea’s second-largest flag carrier that is up for grab because of its deteriorating bottom lines over the past year.
They are Aekyung Group, Hyundai Development Company(HDC)-Mirae Asset Daewoo consortium, the Korea Corporate Governance Improvement Fund (KCGI), and Stonebridge Capital.
Aekyung, which already holds Jeju Air, strives to acquire Asiana to strengthen its competitiveness in the business. Jeju Air is the country’s first and largest low-cost airline.
HDC, a Seoul-based builder, teamed up with Mirae Asset Daewoo, the country’s primary brokerage house. Deep-pocketed Mirae Asset has much experience in large-sized M&A.
The KCGI is an activist fund, which holds almost 16 percent stake in the country’s flagship carrier, Korean Air.
If the fund manages to snap up Asiana, it would become the largest shareholder of the No. 2 air carrier and second-largest shareholder of the No. 1 player.
It remains to be seen with whom Stonebridge Capital would join hands. The hedge fund has yet to disclose its partners.
The estimated selling price of Asiana is around $1 billion. As its owner Kumho vies to sell off other subsidiaries like Air Seoul and Air Busan together, the price is likely to be doubled.
Asiana netted a loss of $94.4 million last year, which worsened its already-bad financial status. The outfit owes about $2.8 billion to banks and other financial firms, and it has to repay a third of the amount this year.
On a more negative note, Asiana’s auditor of Samil PricewaterhouseCoopers declined to sign off its 2018 financial statements of the carrier citing a lack of information.
This prompted the Seoul bourse operator to suspend trading of Asiana shares early this month.
Against this backdrop, Kumho Asiana Group Chairman Park Sam-koo resigned, and its creditors urged the group to dispose of Asiana. Kumho accepted the demand.