SEOUL: Korean Air Lines on Monday (Nov 16) said it will spend 1.8 trillion won (US$1.62 billion) to become the largest shareholder of indebted Asiana Airlines Inc, in a deal that would create the world's 15th biggest carrier.
The suitor plans to issue 2.5 trillion won worth of shares next year to fund the deal with buyers including its own parent, Hanjin Kal.
It did not specify how it would spend the remainder. Asiana's state-run creditor Korea Development Bank (KDB) said the 2.5 trillion won will include liquidity and funds to conduct integration efforts such as the consolidation or closure of redundant businesses.
KDB also said it will invest 800 billion won in Hanjin Kal.
Korean Air is likely to buy the 30.77 per cent stake in Asiana held by Kumho Industrial, Yonhap reported without citing sources.
Neither Kumho nor Asiana were immediately available to respond to Reuters' requests for comment.
Hanjin Kal's largest shareholder, the Korea Corporate Governance Improvement Fund (KCGI), has said any KDB investment would likely support current management. The activist fund favours replacing family-appointed executives with outsiders.
Combining South Korea's two biggest carriers would create the world's 15th largest airline based on the industry measure of kilometres flown by paying passengers, according to 2019 data from the International Air Transport Association. That represents a jump from 28th for Korean Air and 42nd for Asiana.
Asiana's share price soared 28.7 per cent in Monday trade, while that of Korean Air rose 8.4 per cent and Hanjin Kal rose 3 per cent. The benchmark KOSPI was up 2 per cent.
Article From & Read More ( Korean Air to spend US$1.6b to become Asiana Airlines' top shareholder - CNA )https://ift.tt/38MnB28
Business
No comments:
Post a Comment