Regional Round-Up
Korean Air’s debt escalates
February 1st 2015
Flag carrier, Korean Air (KAL), plans to sell off 44 airplanes, mainly B747s, by 2017 as part of efforts to reduce a multi- billion dollar debt that is forecast to increase when the company announces its final quarter results this month. Read More » In January, KAL associate company, Hanjin Energy, sold its 28.4% holding in South Korean refiner, S-Oil to Saudi Arabian offshore oil company, Aramco Overseas Co. The deal, worth US$1.83 billion, will be followed by a sale of shares in KAL in a new issue next month. Combined with progressive disposals of some lower valued assets, the share and aircraft sell off could provide KAL with another US$3.2 billion for debt reduction.
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Separately, Cho Hyun-Ah (40), one of the three children of KAL chairman, Cho Yang Ho, remained in detention at press time, following her January 18 plea of not guilty in the South Korean courts to charges of flight plan changes, coercion and obstructing justice. She was ordered into detention at the end of December. The “nut rage” case, which became a national scandal in South Korea, erupted after the heiress became enraged when she was served Macadamia nuts in a bag rather than a bowl, as required in first class. At the time, the aircraft in which she was travelling had pushed back in New York and was taxing to the runway for take-off. She ordered the aircraft to return to the gate so the offending flight purser could be put off the plane. Cho could face up to 15 years in jail. It is predicted she will receive a suspended sentence, but that KAL will be punished with a fine of US$2 million and a ban on serving some of its route network for several weeks.
