Aekyung, HDC, KCGI bid for Asiana
KDB seeks to single out preferred bidder in 2 weeks; finalize deal by December
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.
An Asiana Airlines carrier is seen above