Korean Air delays request for project fund … “First to seize Asiana”

Korean Air postpones its application for the Basic Industry Stability Fund (hereinafter referred to as the Initiative Fund) and makes the acquisition of Asiana Airlines a top priority.

According to the industry on the 18th, Korean Air will postpone the application for the preliminary fund, which was delayed this month, to next year.

A Korean Air official said: “It is time to concentrate all our capabilities for the difficult acquisition of Asiana.” “The draft of the request for funds will be made when the acquisition of Asiana is somewhat finalized.

Since it is costly to request the draft fund and proceed with the Asiana acquisition at the same time, you have decided to proceed with priority.

Initially, Korean Air planned to apply for a preliminary fund worth KRW 1 trillion last month. However, in the process of consulting with related organizations such as the Korean Development Bank, there were disagreements about the high interest rates, so I decided to apply this month.

The draft fund was determined to be insufficient in operating funds for the coming year, and was intended to ensure liquidity in advance.

The new request is expected to be around March next year, when 1.8 trillion won will be provided for the Asiana acquisition.

Hanjin Kal’s new shares are expected to trade on March 22 next month, and Korean Air’s new shares are scheduled to trade on March 24 next year. Prior to this, it is necessary to amend the articles of incorporation to expand the upper limit for a paid capital increase of 2.5 trillion won by Korean Air. The extraordinary shareholders’ meeting for this is scheduled for January 6 of next year.

Since then, Korean Air will participate in Asiana’s tripartite capital increase worth 1.5 trillion won and will acquire new shares on June 30 next year. At this point, all procedures for the Asiana acquisition are completed.

Asiana Airlines applied for the preliminary fund early, and in September, the Fund’s Board of Directors confirmed the support of 2.4 trillion won. Asiana, whose credit rating is ‘BBB-‘, is known to have been supported at an interest rate of 7% by adding the market interest rate and the additional interest rate. Annual interest expense alone, from a low of 100 billion won to a high of 190 billion won, generated controversy over high interest rates.