Aekyung, HDC, KCGI bid for Asiana

KDB seeks to sin­gle out pre­ferred bid­der in 2 weeks; fi­nal­ize deal by December

The Korea Times - - FINANCE - By Jhoo Dong-chan [email protected]­re­atimes.co.kr

Three con­sor­tia led by Aekyung Group, Hyundai De­vel­op­ment Com­pany (HDC) and the Korea Cor­po­rate Gov­er­nance Im­prove­ment (KCGI), re­spec­tively, are par­tic­i­pat­ing in the bid to ac­quire a con­trol­ling stake in Asiana Air­lines.

Asiana Air­lines said Thurs­day it will im­me­di­ately re­view their ap­pli­ca­tions to nom­i­nate a pre­ferred bid­der for the na­tion’s sec­ond-largest car­rier, aim­ing at fi­nal­iz­ing the sale process by the end of the year.

Asiana’s par­ent firm Kumho put up a 31.05 per­cent stake or about 68.68 mil­lion shares in the air­line firm for sale, which is worth 382 bil­lion won ($329.15 mil­lion).

“Kumho’s cred­i­tors, in­clud­ing the Korea De­vel­op­ment Bank (KDB), have strongly pushed the firm to im­prove its fi­nan­cial state. Kumho had no op­tion but to sell its air­line unit un­der the cur­rent cir­cum­stance,” said a mar­ket ob­server who asked not to be named.

Aekyung Group ex­pressed its con­fi­dence in ac­quir­ing Asiana Air­lines.

“Of the three con­sor­tiums, Aekyung is the only firm that has op­er­ated an air­line be­fore,” the firm said. “It has al­ready proved its qual­ity in air­line man­age­ment through op­er­at­ing Jeju Air.”

Aekyung Group formed a con­sor­tium with Stone Bridge Cap­i­tal and Korea In­vest­ment & Se­cu­ri­ties. Un­der the con­sor­tium deal, the three firms have re­port­edly se­cured about 500 bil­lion won worth of cap­i­tal re­serve for the bid.

Homegrown pri­vate eq­uity fund (PEF) KCGI also ex­pressed its con­fi­dence in ac­quir­ing Asiana Air­lines. The PEF 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.

“The na­tion’s air­line in­dus­try is on the chop­ping block,” KCGI CEO Kang Sung-boo 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.”

HDC also joined the bid un­der part­ner­ship with Mi­rae As­set Dae­woo. Mi­rae As­set Fi­nan­cial Group founder Park Hyeon-joo re­port­edly met high-rank­ing of­fi­cials of Credit Suisse, the bid’s sales ad­viser.

“HDC is op­er­at­ing a duty free store busi­ness with Ho­tel Silla. Ac­quir­ing an air­line firm will cre­ate a great deal of syn­ergy with its duty free busi­ness con­sid­er­ing its op­er­a­tion in the na­tion’s air­ports,” said an in­dus­try in­sider.

Kumho and the firm’s cred­i­tor KDB will jointly re­view ap­pli­ca­tions from the three con­sor­tia for the next one or two weeks to sin­gle out the pre­ferred bid­der.

They then aim to con­clude the stock sale agree­ment for a con­trol­ling stake in Asiana Air­lines by the end of December.

Cour­tesy of Asiana Air­lines

An Asiana Air­lines car­rier is seen above

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