Bank dangles more incentives for HDC to buy Korea’s Asiana

State-owned Korea Development Bank, the main creditor of Asiana Airlines (OZ, Seoul Incheon), has offered further financial incentives to ease the burden for Hyundai Development Co (HDC) to acquire the indebted airline and save the deal from collapse, sources close to the deal told the Korea Economic Daily. On top of extending assistance worth KRW800 billion won (USD674 million) in the form of perpetual bonds, the bank is now reportedly considering offering further loans of KRW700 billion (USD590 million) to the preferred buyer. This would help HDC reduce the size of a proposed rights offering from KRW2.2 trillion (USD1.85 billion) to KRW1.5 trillion (USD1.26 billion), which it had planned to lower Asiana’s debt ratio when it takes over the carrier. HDC Chairman Chung Mong-gyu and KDB Chairman Lee Dong-gull met on August 26 to discuss the issue – their third such meeting in recent months. HDC and brokerage Mirae Asset Daewoo agreed in December to buy a 30.77% stake in the airline for about KRW2.5 trillion (USD2.1 billion). The deal was supposed to be completed by June but has been delayed as the current crisis pushes Asiana further into debt. HDC has demanded more due diligence to ascertain the carrier’s true financial status, but creditors and Kumho Industrial object.