Asiana sells part of CJ stake to pay off debts

Asiana Airlines has decided to sell part of its holding shares in CJ Logistics to secure liquidity, the company said in a regulatory filing Friday.

The move comes as the company is set to be hit with a 2 trillion won ($1.8 billion) bill from debts maturing later this year.

According to the regulatory filing the airline is selling 738,427 shares in CJ Logistics in an after-hours block deal on March 20. The shares are valued at 93.5 billion won.

Block deals are a way of selling shares in bulk outside of the stock market’s opening hours to minimize the impact of the sales on the market index. The deal will reduce Asiana’s holding shares in CJ Logistics from 4.99 percent to 1.75 percent.

Two days earlier, the company inked a memorandum of understanding with Deutsche Asset Management to sell Kumho Asiana Group’s office building in Gwanghwamun, central Seoul. The airline held an 80 percent share of the special purpose corporation that operated the building.

The sales are part of a larger effort to sell off non-core assets to rake in as much cash as possible before the debts mature. As analysts speculate that the group’s building in central Seoul will sell at over 400 billion won, the two sales are set to bring Asiana roughly 500 billion won.

While the sale will help, the airline will still come up short as its cashable assets as of last year only amount to roughly 117.5 billion won.

“The airline will try to sell other securities, issue perpetual bonds and pursue an initial public offering of its affiliates to secure more cash,” said Bang Min-jin, a research fellow for Eugene Investment & Securities.

Asiana Airlines’ finances have been suffering since its mother company acquired Daewoo Engineering & Construction for 6.4 trillion won in 2006. While Asiana Airlines also participated in the acquisition by paying 250 billion won for a 2.8 percent share, it ended up selling the shares at roughly 30 percent of the initial purchasing price.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]