News
Asiana contenders narrow with two strong bidders for a majority of the carrier
October 18th 2019
Korean courts uphold 45-day ban on Asiana’s San Francisco flights. Read More »
By the end of the year, Asiana Airlines is expected to have a new majority shareholder, either Aekyung Group (AK), the flagship investor in Jeju Air, or a joint representation made up of two chaebols, Hyundai and Daewoo.
The majority holding will be facilitated by the 31% equity held by Kumho in the carrier and a capital injection likely to be made by the issue of new shares.
Activist equity fund, Korea Corporate Governance Improvement (KCGI), is not considered to be a likely investor. It has not announced a financial partner, which it sorely needs given its limited cash position.
AK was seen as too weak financially to make a bid, but this week it announced it was partnering with a financial investor, Stonebridge Capital. Korean media estimates AK has KRW400 billion in cash and cash equivalents (US$338.8 million) while the Hyundai-Daewoo bid has KRW1 trillion. Stonebridge is believed to have KRW1 billion, but it would take a much smaller share in Asiana than AK.
Asiana is disclosing more company information to bidders, including aircraft lease contracts, but has declined to state sensitive data such as aircraft purchases and engine maintenance documentation.
Separately, Korea's Supreme Court this week upheld a 45-day ban on Asiana flights between Seoul and San Francisco, a punishment for management culpability in the July 2013 crash of an Asiana aircraft at San Francisco airport, which took the lives of two passengers and injured another 182. Korea said it would ask other airlines, essentially Korean Air, to boost San Francisco capacity during Asiana’s suspension from March 3 to April 16 next year.
