South Korea’s second biggest air carrier to be up for sale
Asiana Airlines, South Korea’s second-biggest air carrier, would be put up for sale in the near future as its parent company, Kumho Asiana Group, was struggling with liquidity crunch and massive debts.
Kumho Asiana Group decided to sell off its flagship unit of Asiana Airlines through the board of directors’ meeting of Kumho Industrial, the largest shareholder of the air carrier that owned a 33.47 percent stake, local media reported on Monday.
The stake was valued at about 300 billion won (265 million US dollars). Shares of Asiana Airlines jumped the daily permissible limit of 30 percent to finish at 7,280 won (6.4 US dollars).
When taking into account the management premium of the airline’s affiliates, the acquisition cost was estimated at over 1 trillion won (882 million US dollars). Park Sam-koo, former Kumho Asiana Group chairman who resigned last month as chief executive of Asiana Airlines, controls an express bus operator Kumho Business, which in turn is the biggest shareholder of the Kumho Industrial.
The Kumho Asiana submitted its self-help plan, including the sale of the airline unit, to its major creditor, the state-run Korea Development Bank (KDB), earlier in the day.
Asiana Airlines, which accounts for about two thirds of the Kumho Asiana Group’s total revenue, had a combine debt of 3.44 trillion won (3 billion US dollars) as of the end of 2018, including a short-term debt of 1.32 trillion won (1.2 billion US dollars) that matures in a year.
The airline swung to a net loss of 10.4 billion won (9.2 million US dollars) in 2018 from a net profit of 248 billion won (218.8 million US dollars) in the previous year.