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4 bidders shortlisted in Asiana Airlines deal

Economy 15:56 September 11, 2019

By Choi Kyong-ae

SEOUL, Sept. 11 (Yonhap) -- Four South Korean bidders have made the shortlist in an auction to acquire Asiana Airlines Inc., the country's second-biggest full-service carrier, industry sources said Wednesday.

Cosmetics-to-airline conglomerate Aekyung Group, a consortium formed by Hyundai Development Co. and Mirae Asset Daewoo, another consortium led by local activist fund Korea Corporate Governance Improvement (KCGI) and a Stone Bridge Capital-led consortium made it onto the shortlist to buy a controlling stake in Asiana Airlines, people familiar with the deal told Yonhap News Agency over the phone.

When contacted by Yonhap, Aekyung, the Hyundai Development-Mirae Asset consortium and the Stone Bridge Capital consortium confirmed that they were among the four qualified bidders out of five bidders that had submitted initial bids.

In a statement released Wednesday, Aekung said, "(The group is) the only strategic investor which has 13 years of accumulated experience and know-how in operating an airline.

"We are in talks with multiple highly credible financial investors for a partnership in the Asiana auction," the statement said.

4 bidders shortlisted in Asiana Airlines deal - 1

AK Holdings, the holding firm of Aekyung Group, owns a 56.9 percent stake in Jeju Air Co., the nation's largest low-cost carrier by sales.

Park Seong-joon, a spokesman for the Stone Bridge Capital consortium, said the homegrown fund will be able to release details about its strategic partner or partners next week.

Credit Suisse, which advises the deal, declined to comment.

Kumho Asiana Group, the parent of Asiana Airlines, aims to sell a 31 percent stake in the airline held by its subsidiary, Kumho Industrial Co., together with its six affiliates as part of its broad restructuring efforts. The six affiliates include two budget carriers -- Air Seoul Inc., which is wholly owned by the airline, and 46 percent owned by Air Busan Co.

The 31 percent stake was valued at 379 billion won (US$318 million) at Wednesday's closing price of 5,520 won. But analysts estimate the deal could fetch up to 2 trillion won when management premiums and the value of new shares to be issued are taken into account.

Major conglomerates, such as SK, CJ and Hanwha, had been widely mentioned as potential buyers for Asiana, but they did not participate in the initial auction.

Kumho Asiana, an airline-to-petrochemical conglomerate, plans to complete the sale of the airline unit within this year. Kumho Industrial plans to receive final bids in October and select a preferred bidder in November.

In 2018, Asiana Airlines and its main creditor, the state-run Korea Development Bank, signed a deal that required the carrier to secure liquidity through sales of assets and other means.

In the January-June period, the airline's net losses widened to 292 billion won from 43 billion won a year earlier due to the won's weakness against the dollar. A weak won drives up not only the value of dollar-denominated debts when converted into the local currency but also fuel purchasing costs.

It owed financial institutions a total of 2.7 trillion won as of the end of June, with 500 billion won of loans maturing by the end of December.

kyongae.choi@yna.co.kr
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