HDC-Mirae consortium gets closer to buying Asiana

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HDC-Mirae consortium gets closer to buying Asiana

Published: 12 Nov. 2019, 15:51

Chairman Chung Mong-gyu of HDC Hyundai Development speaks at a press conference about a consortium led by his company being named preferred bidder for Asiana Airlines at the company’s headquarters in Yongsan District, central Seoul, on Tuesday. [HDC HYUNDAI DEVELOPMENT]

Asiana Airlines could have its first new owner since the company was founded 31 years ago after a bid by HDC Hyundai Development and Mirae Asset Daewoo for a controlling stake in Korea’s second-largest airline was selected.

The board of Kumho Industrial, which created the airline in 1988, chose the joint bid over two others by Aekyung Group, the cosmetics giant that owns budget airline Jeju Air, and the Korea Corporate Governance Improvement Fund (KCGI), an activist investment fund which is also the second-largest shareholder of Korean Air, the country’s largest airline.

Kumho Industrial has put its 31.05 percent stake in Asiana up for sale under pressure from creditors.

The choice was made less than a week after bids were accepted last Thursday.

“Among the three consortium that participated in the final bidding for Asiana Airlines, the HDC-Mirae Asset consortium was chosen as it was considered the most appropriate candidate to normalize Asiana Airlines’ management and secure the airline’s competitiveness over the long run,” said a Kumho Industrial official.

Selling the stake will help Kumho Industrial improve its finances, the official said, including reducing its debt, and allow it to invest in new businesses.

It was reported that the HDC Hyundai Development-Mirae Asset Daewoo consortium offered the highest bid of around 2.4 to 2.5 trillion won ($2.06 to $2.15 billion) while the other two bids were around 1.5 trillion won.

The sale also includes six affiliates of the airline including budget airlines Air Busan, which Asiana Airlines owns a 44.2 percent stake in, and Air Seoul, which it owns completely.

“If the HDC Hyundai Development consortium successfully acquires all airlines under Asiana Airlines, it is expected to take advantage and aggressively compete in the market,” said Jade Lee, service and payment analyst at Euromonitor International Korea.

“In addition, it is expected to have great synergy with the hotel business and duty free business that Hyundai Development has been already operating.”

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]