The deadline for the stake transfer of South Korea’s second-largest air carrier, Asiana Airlines, has been extended to the fourth week of December, according to industry sources Dec. 12.
The preferred bidder, a consortium comprising Hyundai Development Co. and Mirae Asset Daewoo, fell short of acquiring a 31.05 percent stake in Asiana Airlines from Kumho Asiana Group within a month, after Kumho gave the HDC-led consortium the exclusive rights to negotiate Nov. 12.
Over the past month, Kumho and the HDC-led consortium locked horns over the pricing of the existing shares owned by Kumho as well as an alleged breach of fair business practices by Kumho.
HDC-led consortium close to controlling Asiana Airlines
The HDC-led consortium insisted it cannot pay a control premium for the acquisition, valuing the shares at a combined 320 billion won ($269.6 million) and disputing Kumho’s 400 billion won valuation. Kumho conceded.
In the meantime, the prospective acquirer demanded that Kumho accept a 10 percent post-closing purchase price adjustment -- meaning the purchase price might be cut by that amount. The HDC consortium cited the possibility of having to pay a fine on the orders of Korea’s Fair Trade Commission. Kumho was accused of abruptly cutting business ties with an in-flight meal supplier after the supplier refused to invest 160 billion won in Kumho Holdings’ bond warrants.
If the two parties had closed a deal, the HDC-led consortium would have proceeded to buy newly issued shares of Asiana Airlines and become the controlling shareholder.
The HDC-led consortium is expected to become the operator of Asiana Airlines and subsidiaries including Asiana IDT and Air Busan.
By Son Ji-hyoung (firstname.lastname@example.org)