Asiana bidder insists it is committed to dealHDC Hyundai Development, the preferred bidder for Asiana Airlines, said Wednesday it remains committed to signing a deal this year to acquire the country’s second-biggest airline.
The company made the statement in response to market concerns that the HDC-Mirae Asset Daewoo consortium won’t be able to sign an agreement to purchase a controlling stake in Asiana Airlines from Kumho Industrial on Thursday due to differences over prices and debts.
Kumho Industrial, which owns a 31 percent stake in Asiana Airlines, selected the HDC-Mirae consortium as the preferred bidder on Nov. 12, allowing the consortium to exclusively negotiate with the seller over prices and other terms for a 30-day period ending Thursday.
“We have not targeted signing a share purchase agreement by Thursday but aimed at signing it within the year. We are in talks with Kumho Industrial to proceed with the deal,” a HDC spokesman said over the phone.
Kumho Industrial also said the company is “fine-tuning” the deal’s details without setting the date for the share purchase agreement.
HDC and Kumho Industrial have reportedly been at odds over the pricing of existing Asiana shares and possible contingent liabilities, raising concerns that the two parties may not sign a share purchase agreement as agreed.
The companies did not confirm the reports.
But the two sides appear to be moving forward to sign the deal as planned given that Lee Dong-gull, chairman of state-run Korea Development Bank, said last week, “Kumho is in negotiations to sell the airline by December as planned.”
On Wednesday, Asiana Airlines jumped 3.4 percent to 5,480 won ($4.60) on the news, far outperforming the broader KOSPI’s 0.4 percent gain.
But HDC Hyundai Development plunged 5.6 percent to 25,200 won and Kumho Industrial fell 0.9 percent to 10,800 won on investor concerns over the financial burden buying the airline would place them under.
Last month, the HDC-Mirae consortium beat two consortia led by Aekyung Group and Korea Corporate Governance Improvement, respectively, in the auction for the full-service carrier.
The HDC consortium submitted an overall acquisition price of 2.5 trillion won for the 31 percent stake, as well as new shares to be issued and the airline’s six affiliates, which include low-cost carriers Air Busan and Air Seoul.
The 31 percent stake was valued at 365 billion won at the closing price of 5,310 won on Nov. 7 when the consortia submitted their final bids.