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(Yonhap) |
After a planned sale of debt-ridden Asiana Airlines to HDC Hyundai Development collapsed, the carrier is expected to undergo organizational restructuring, including sales of some of its subsidiaries.
Also due to the sales failure, Asiana’s largest shareholder Kumho Industrial and HDC Hyundai Development are both expected to file lawsuits, as they blame each other for the deal’s collapse.
Creditors, including Korea Development Bank, are considering selling subsidiaries such as Air Busan, Air Seoul and golf courses owned by Kumho Resort. KDB earlier said it would consider selling low-cost carriers separately if HDC gives up the acquisition of Asiana Airlines.
Still, it may not be easy to sell them immediately, as in the case of Eastar Jet, due to the worsening business situation caused by the pandemic, industry watchers said.
There is also a possibility that existing shareholders will reduce their capital. Creditors are expected to ask Kumho Industrial to reduce capital in order to hold it responsible for the deal’s failure.
“We will review whether existing shareholders will reduce capital depending on the company’s financial status or creditor management status at the end of the year,” KDB Vice President Choi Dae-hyun said.
As huge amounts of public funds are spent on normalizing Asiana Airlines, it is expected that the company will sell idle assets and reduce routes to improve its fundamentals. The nation’s second-largest carrier is expected to save about 180 billion won ($151 million) in labor costs by the end of next month by implementing its self-rescue efforts. However, it is predicted that there will be no immediate large-scale restructuring.
Choi said, “The additional self-rescue plan is likely to be divided into three categories, such as adjusting routes, reducing internal costs and reorganizing the organization.”
Amid the failure to sell Asiana Airlines, Kumho Industrial and HDC Hyundai Development are expected to file a lawsuit over the down payment of 250 billion won, as they blame each other for the failure to complete the sale.
“The deal was canceled due to the failure of Kumho Industrial to meet prerequisites,” HDC said. “There is no other choice except for the lawsuit.”
In response, Kumho said, “The M&A contract broke down as HDC, which was selected as the preferred bidder in November last year, did not make a decision until the final deadline.”
By Shin Ji-hye (
shinjh@heraldcorp.com)
