KCGI considers acquiring Asiana Airlines
The Korea Corporate Governance Improvement (KCGI) is reviewing its plan to acquire debt-ridden Asiana Airlines, according to industry sources and media reports.
Multiple sources said that KCGI CEO Kang Sung-boo said the homegrown PEF “received an Information Memorandum (IM) from Asiana Airlines and is reviewing its options” for the possible acquisition.
Kumho Engineering & Construction (E&C), Asiana’s holding company, announced July 25 that it will sell its stake in its airline unit.
Under the decision, it will receive a letter of intent (LOI) from prospective bidders to single out the shortlist by the end of September. The main bid is scheduled for October. Rumors alleged a number of domestic conglomerates, including SK, Hanwha, Aekyung and CJ, have expressed their interest in the bid, but only Aekyung confirmed its interest.
Sources said the KCGI is expected to form a consortium with local firms to acquire the stake in Asiana Airlines.
“The nation’s airline industry is on the chopping block. We need to stick together to overcome the crisis,” Kang was quoted as saying by a local media outlet.
“I believe the KCGI could contribute to the industry by strengthening ties between the nation’s two largest airliners to overcome it.”
Share price of Asiana Airlines jumped nearly 3 percent on the Monday opening from the previous session. The share price of Air Busan, the airliner’s low-cost carrier unit, also opened over 2 percent on Monday.
The KCGI is Hanjin KAL’s second-largest shareholder as its subsidiary Grace Holdings owns a 15.98 percent stake in Hanjin Group’s holding company. Korean Air is Hanjin KAL’s air carrier unit.