Creditors set to call off Asiana sale as talks founder

Asiana Airlines (OZ, Seoul Incheon) is set to fall under creditor control amid reports the proposed sale of the cash-strapped carrier to the Hyundai Development Co. (HDC) and Mirae Asset Daewoo consortium is on the verge of collapse. Under the KRW2.5 trillion won (USD2.1 billion) deal signed in December 2019, the consortium would have acquired Kumho Industrial’s 31.05% stake in Asiana. Thereafter, HDC was supposed to increase its shareholding to 61.5% of the airline for KRW2.01 trillion (USD1.69 billion), with Mirae Asset taking 15.0% for KRW490 billion (USD412.7 million). However, following the impact of the COVID-19 pandemic and the devastating impact it has had on international travel, the consortium has cooled on its planned purchase. Most recently, it said it had to conclude a fresh due diligence of the carrier before committing to anything, a request the KDB and other creditors refused. Instead, the creditors proposed a joint investment wherein they and HDC would contribute KRW1.5 trillion (USD1.263 billion) each ― which HDB refused. The bank had earlier offered to cut Asiana’s purchase price by KRW1 trillion (USD842 million). Citing sources familiar with developments, local media said on Sunday that Asiana’s main creditor, the state-owned Korea Development Bank, was now “seriously considering” nullifying the entire sale after HDC failed to show any positive will towards the finalisation of the deal ahead fo the passing of a Thursday, September 3, deadline.