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“Respect HDC’s decision … When it stabilizes, it is promoted for resale”
On the 11th, the creditors, the Korea Development Bank and the Export-Import Bank, officially announced that the merger and acquisition of HDC Prefecture and Asiana Airlines had collapsed.
Accordingly, the Bank of Korea will first provide 2.4 trillion won to Asiana Airlines through new credits from the Basic Industry Stability Fund (Initiative Fund) to normalize the business.
Asiana Airlines, losing its owner due to failure to take over, turns over to KDB, a creditor, and business normalizes under KDB’s management. The Bank of Korea is in a position to prepare its own self-sufficiency plan for the standardization of Asiana Airlines and do everything possible to enhance corporate value such as route optimization and cost reduction.
Korea Development Bank Vice President Choi Sang-heon said at an online press conference that day: “We plan to promote the standardization of Asiana Airlines in consultation with the Kumho Group.” “We plan to resell Asiana Airlines as soon as conditions are established, while we implement multilateral measures for our customers.”
Regarding the failed acquisition of HDC prefecture, “On the surface, there is no change in the current position that HDC prefecture is a re-inspection. They will be “.
He said, “I think Hyunsan did it with goodwill in April last year, but I fully respect the decision he made that the deal itself cannot go any further due to the uncertainty caused by the crown crisis.”
Previously, late last year, HDC Hyunsan formed a consortium for the acquisition of Mirae Asset Group and Asiana Airlines, and was scheduled to complete the acquisition process by June 27, but the acquisition was re-investigated at source on June 10, before the acquisition deadline. He has been in conflict with creditors San Eun, asking for a review.
On the 3rd, Korea Development Bank Chairman Lee Dong-geol proposed a “ grand deal ” with a 1 trillion won discount on the acquisition price to HDC Prefecture, but HDC Prefecture he continued to do due diligence and eventually rejected the proposal, and the merger and acquisition ultimately failed.
On the surface, it is due to the re-realization conflict with the HDC prefectures, but fundamentally, it is due to the increase in cargo such as the crisis in the aviation industry caused by Corona 19 and the increase in debt of Asiana Airlines.
Asiana Airlines’ debt in the first half of this year amounted to 11.5459 million won and its debt ratio reached 2366%. If HDC Hyunsan acquires Asiana Airlines, the risk is high after the acquisition as it has to pay 2 trillion won for at least a year.
With the acquisition failed, the legal battle between Kumho Group, which was the owner of Asiana Airlines, and HDC Prefectural Industries, will seriously escalate.
“Currently, both Kumho Group and HDC Hyunsan insist that the acquisition will be canceled due to the fault of the other party,” said Choi Choi, vice president. “We are expecting various lawsuits and the Bank of Korea is also contemplating.”
He said: “The claim will be challenged in court, but as a creditor, we will respond by considering resale.”
However, it is inevitable that Asiana Airlines’ credit rating will go down because it did not take over. Currently, Asiana Airlines’ credit rating is at the ‘BBB (Review Uncertain)’ stage, the lowest investment rating. Even this is a rating that reflects the expectations of the acquisition of HDC Prefecture. As the sale was finally canceled, a further downgrade is inevitable.
The problem is that only the asset-backed securities (ABS) that need to be repaid immediately when the downgrade becomes visible will reach 700 billion won. ABS refers to securities issued on the basis of tangible and intangible securitized assets, such as trade receivables and real estate held by a company.
To answer this, the KDB also supports consulting such as capital expansion and internal renewal through the draft fund. After that, when conditions improve, the company plans to resell Asiana Airlines to find a new owner.
If business normalization is delayed due to prolonged Corona 19, plan to check for additional support through external financial institutions etc. and take action with the government.
Vice President Choi Choi said: “If Corona 19 goes beyond expectations, we will discuss with the government to come up with a more fundamental plan.”
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