KDB denies ‘Plan B’ exists on Korean Air-Asiana deal

Korean Air Lines' and Asiana Airlines' airplanes parked at Incheon International Airport. [YONHAP]

The Korea Development Bank (KDB), a main creditor of Asiana Airlines, has denied media reports it is considering the sale of Asiana Airlines to a third party other than Korean Air Lines.

The statement comes as a response to a local media report suggesting that the state-run bank is exploring a third-party sale by contracting Samil PwC for consulting services regarding the stabilization of Asiana Airlines amidst the ongoing process of corporate integration.

"The services provided by Samil PwC are primarily focused on conducting a comprehensive financial assessment of Asiana Airlines in light of the evolving aviation market conditions during the post-Covid era," a KDB press release said on Monday evening. "These services are separate from any potential third-party sale."

KDB announced in November 2020 that it would provide 800 billion won ($610 million) of finance to Hanjin KAL, Korean Air's parent company, to help the carrier acquire debt-laden Asiana Airlines following the Covid-19 outbreak.

However, the regulatory approval process has encountered hurdles due to concerns raised by foreign competition authorities in the United States and the European Union, citing potential issues related to restrictions in market competition.

KDB remains steadfast in its commitment to the merger and has conveyed that it does not consider the idea of the merger falling through.

“The bank isn’t considering a Plan B for Korean Air Lines’ acquisition of Asiana Airlines at all,” KDB Chairman Kang Seog-hoon said during a press conference in June to celebrate the first anniversary of his chairmanship.

"We anticipate reaching a resolution during the third quarter of this year," Kang added.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]