Tit-for-tat escalates on Asiana-HDC deal

Tension surged in the aviation industry Thursday, with HDC Hyundai Development Co. and Asiana Airlines trading barbs over who is to blame for the lagging acquisition process.

HDC on Thursday repeated its call for Asiana to agree to a new round of due diligence in August to finalize its acquisition process.

In a statement, the building company said that its call for another round of due diligence last week is being ignored, and claimed that Kumho Industrial and the airline appear poised to terminate the contract, citing documents it has received. The company reiterated it still wants to help the country’s aviation industry recover through the acquisition.

Kumho Industrial, for its part, said it was concerned by HDC’s move to “place the responsibility on the company and the airline” and urged the company to cooperate with the process to finalize the deal. Kumho Industrial acts as the holding company of Kumho Asiana Group.

“The worsening performance and drastic changes in the aviation industry as a result of the COVID-19 pandemic crisis cannot be a reason to terminate the contract,” one official at Kumho Industrial said.

It also denied claims that it did not provide sufficient data as part of the acquisition process.

“It is extremely regretful that HDC Hyundai Development Co. says it has not been provided even with a basic contract document, implying that there hasn’t been enough verification and distorts the truth.”

The comments refer to HDC’s earlier accusation that Kumho Industrial and Asiana of not providing sufficient data despite multiple requests.

Following Thursday’s back-and-forth, Lee Dong-gull, chairman of the state-run Korea Development Bank, one of Asiana main creditors, said “there will be a statement sometime next week” during a meeting with reporters.

In December, the two sides agreed an acquisition deal which would have seen a consortium of HDC and Mirae Asset Daewoo acquire a controlling 31 percent stake in the country’s second-largest air carrier from Kumho Industrial for 2.5 trillion won ($2.1 billion).

But the tone of the exchange turned grim in recent months amid the pandemic woes that have engulfed the aviation industry. The two sides, however, contend that they want to see the deal pull through.

By Yim Hyun-su (hyunsu@heraldcorp.com)