Will-HDC-acquire-Asiana
Hyundai Development head office in Seoul/Courtesy of HDC

Three players strive to purchase No. 2 flag carrier

Two consortia led by Aekyung Group and Hyundai Development (HDC) each strive to acquire Asiana Airelines, the country’s second-largest flag carrier that is up for grab.

A total of three consortia headed by the two players submitted final bids for the cash-strapped airline company this week. The other one, which is headed by the Korea Corporate Governance Improvement, is regarded as an underdog.

Aekyung is a cosmetics conglomerate that has budget airliner Jeju Air under its wing. It joins hands with Stone Bridge to aggressively try to purchase Asiana Airlines.

HDC is one of the country’s largest builders. The Seoul-based outfit teamed up with the nation’s foremost brokerage Mirae Asset Daewoo.

There were reports that the HDC consortium is the strongest candidate as its bidding price tops $2 billion while that of the Aekyung consortium is around $1.5 billion.

But the Korea Development Bank, which tries to sell the 31-percent stake of Asiana, did not confirm the rumor. HDC and Aekyung also remain tight-lipped.

No matter what bidder becomes the winner, it might not be happy because the market value of the 31-percent stake is just above $300 million.

But both the Aekyung consortium and HDC consortium appear to be eager to snap up Asiana.

Asiana netted a loss of $94.4 million last year, which worsened its already-bad financial status. The firm owes about $2.8 billion to banks and other financial firms, and it has to repay a third of the amount this year.

Asiana’s auditor of Samil PricewaterhouseCoopers declined to sign off its 2018 financial statements of the carrier, citing a lack of information.

This made the Seoul bourse operator suspend trading of Asiana shares earlier this year.

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.

 

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