Korean banks to renegotiate HDC’s acquisition of Asiana

The two state-owned banks that have provided KRW3.3 trillion won (USD2.7 billion) to Asiana Airlines (OZ, Seoul Incheon) over the last year say they are ready to meet Hyundai Development Co (HDC) to renegotiate the terms of the property developer’s planned acquisition of the airline, Yonhap News Agency reported on June 10. Korea Development Bank (KDB) and the Export-Import Bank of Korea agreed in April to provide up to KRW1.7 trillion (USD1.4 billion) in fresh liquidity to Asiana Airlines, on top of KRW1.6 trillion (USD1.3 billion) extended to the carrier in April 2019. On June 9, HDC called for a renegotiation with the banks, citing the coronavirus crisis as “an unexpected and very negative factor” that will substantially affect its acquisition plan. HDC and brokerage Mirae Asset Daewoo agreed in December to buy a 30.77% controlling stake in the airline for about KRW2.5 trillion (USD2.1 billion). Asiana has since recognised an additional KRW2.8 trillion (USD2.35 billion) of debt as at the end of 2019 and borrowed the extra KRW1.7 trillion in April. “HDC needs to first propose what acquisition terms it wants to be changed before the related parties begin talks over the acquisition deal. HDC needs to come to the negotiating table instead of sending a letter or releasing a press statement,” the KDB said in a statement.