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Asiana Airlines receives increased funding from local banks
April 24th 2020
Two South Korean state banks have pledged to extend financial support to Asiana Airlines, local media reported this week. Read More »
The Korea Herald said the Korea Development Bank and Export-Import Bank of Korea would tip in 1.7 trillion won (US$1.4 billion) to ensure Asiana continues to operate during the COVID-19 pandemic.
The funding tops up the1.6 trillion won Asiana had received from the two banks in 2019.
Since the start of the coronavirus pandemic, loss-making Asiana has required its 10,500 staff to take 15 days unpaid leave in April and for executives to reduce their salary packages.
The Star Alliance member also has grounded the bulk of its fleet of more than 370 airplanes and accelerated the retirement of older aircraft.
Asiana has reported a net loss of 672.7 billion won for the 12 months to December 31, 2019, compared with a net loss of 598.8 billion won in the same months a year earlier.
Revenue fell 4%, to 5.95 trillion won, the company said in February.
In November 2019, a Hyundai Development Company and Mirae Asset Daewoo consortium was named the preferred bidder to take over Asiana. The South Korean conglomerate, Kumho Industry, is the largest shareholder in Asiana, with its holding of 31%.
Under terms of the deal, the consortium would purchase Kumho's shares in the airline and inject fresh capital of about 2 trillion won into Asiana, South Korea's second-largest carrier, through a share issue.
The transaction had been expected to close at the end of April. However, market watchers thought this outcome was unlikely, given the impact of the coronavirus pandemic on global markets.
The deal also needed the all clear from regulators in various jurisdictions to proceed to approval.
