Consortium named preferred bidder for cash-strapped Asiana Airlines

By Ohn Jong-hoon, UPI News Korea

SEOUL, Nov. 15 (UPI) -- Kumho Asiana Group has named the consortium of Hyundai Development and Mirae Asset Daewoo as the preferred bidder for Asiana Airlines, Korea's second-largest full-service carrier.

Kumho, which put its 31.05 percent stake in Asiana up for sale, said that HDC-Mirae Asset consortium is the most qualified bidder to normalize Asiana's management.


Asiana has been forced to cut its debt, which amounted to about $2.3 billion at the end of July.

However, the money-losing airline saw its bottom line deteriorate this year because its first-half net loss widened to about $250 million from $36.9 million a year ago.

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Earlier this year, the Seoul bourse operator also suspended trading of Asiana shares after its auditor declined to sign off its 2018 financial statements citing a lack of information.

Against this backdrop, Kumho Asiana Group Chairman Park Sam-koo resigned, and its creditors urged the group to sell Asiana.

Last week, HDC-Mirae Asset consortium, composed of the country's top-tier builder and No. 1 brokerage house, reportedly submitted the highest bid of $2.1 billion.

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Its two competitors, headed by Aekyung Group and the Korea Corporate Governance Improvement Fund, are believed to bid some $1.2 billion.


The former is a cosmetics giant, which runs budget carrier Jeju Air, while the latter is an activist investment fund, which is the second-largest shareholder of Asiana's bigger rival Korean Air.

"Among the three candidates, we opted for the HDC-Mirae Asset consortium because it is regarded as the best bidder to put Asiana's business back on track and secure the airline's long-term competitiveness," a Kumho official said.

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Kumho, which founded Asiana in 1988, decided to sell the airline company under the pressure of creditors. By selling the stake, the group strives to improve its financial status by reducing debt.

From the perspective of HDC, the Seoul-based contractor hopes to snap up Asiana to create synergy with its existing businesses of hotels and duty-free shops.

HDC is headed by Chairman Chung Mong-gyu, the nephew of Hyundai Group founder Chung Ju-yung. Hyundai Motor Group Chairman Chung Mong-gu is his cousin.

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