Asiana deal at critical juncture, leaning toward collapse
A Boeing 747 of Asiana Cargo takes off from San Francisco International Airport on Aug. 1, 2020, in San Francisco, Calif. AFP
Creditors of embattled Asiana Airlines Co. are drawing up a set of countermeasures against the potential rupture of a deal to sell the country's No. 2 carrier, as local property developer Hyundai Development Co. is leaning toward withdrawing from the 2.5 trillion-won (US$2.1 billion) deal, industry sources said Sunday.
The state-run Korea Development Bank (KDB) last week warned that HDC should proceed with the deal to buy Asiana Airlines, rejecting HDC's request for another round of due diligence on the country's No. 2 air carrier.
In December, the HDC-Mirae Asset Daewoo consortium signed the deal to acquire the carrier from Kumho Industrial, a construction unit of Kumho Asiana Group, as well as new Asiana shares to be issued and Asiana's six affiliates, for 2.5 trillion won.
HDC has completed seven weeks of due diligence on Asiana Airlines.
But HDC has demanded an additional 12 weeks of due diligence on the debt-laden carrier beginning in mid-August, claiming it will be forced to shoulder Asiana's heavy debts if it acquires the airline without looking into its current financial conditions hit hard by the coronavirus pandemic.
The creditors think Tuesday is the deadline for HDC to show its stance of whether to push ahead with its acquisition of Asiana Airlines as all requirements for the deal are met.
KDB and other creditors are also looking at various options, including creditor-led management of the airline, in case the deal falls through.
Meanwhile, Asiana delivered an earnings surprise for the second quarter of the year on the back of robust cargo business.
Asiana said Friday it shifted to a net profit in the second quarter from a year earlier as cargo-carrying volumes offset lower travel demand amid the new coronavirus outbreak.
The country's second-biggest carrier swung to a net profit of 116.15 billion won in the April-June quarter from a net loss of 183.14 billion won in the same period last year, the company said in a statement.
Asiana also shifted to an operating profit of 115.08 billion won in the second quarter from an operating loss of 107.03 billion won a year ago. Sales fell 45 percent to 818.6 billion won from 1.48 trillion won.
Asiana has suspended most of its flights on international routes since March, as more than 180 countries and territories closed their borders or imposed entry restrictions on incoming passengers amid virus fears.
From January to June, net losses widened to 432.9 billion won from 267.4 billion won in the year-ago period. Operating losses fell 33 percent to 2.04 trillion won from 3.04 trillion won during the same period. (Yonhap)