SEOUL: A South Korean construction firm on Friday signed a deal to acquire Asiana, the country’s second-largest airline, which has long been plagued by financial problems.
The HDC Hyundai Development Company said its consortium closed on a 2.5 trillion won ($2.2 billion) controlling stake in the troubled airline, which currently owes some 3 trillion won to financial institutions. Kumho Industrial, the carrier’s biggest shareholder, put its 31% stake up for sale earlier this year under pressure from its creditors.
The deal also includes Asiana’s affiliates, including low-cost carriers Air Seoul and Air Busan. “We will immediately get into the process of taking over Asiana Airlines to (financially) stabilise the company,” Chung Monggyu, HDC Hyundai Development chairman, said in a statement. Kumho, Asiana’s parent company for more than 30 years, has struggled in recent years and was hit especially hard by the global financial crisis.
Last year, Asiana’s then-chairman offered an apology after many of its planes took off without any meals because the airline was suddenly forced to switch caterers in a bid to help improve its finances. The airline’s troubles deepened this year because of the trade dispute between Japan and South Korea, which resulted in lower demand for trips between the two countries, as well as a weak won against the dollar. Asiana shares were down 3.38% Friday afternoon in Seoul.
Source: Economic Times