Mirae Asset to enter aircraft lease biz

Mirae Asset Financial Group founder Park Hyeon-joo

By Lee Kyung-min

Mirae Asset Group is seeking to enter the aircraft leasing business in a move to maximize synergy with its soon-to-be business partner Asiana Airlines, the nation's second-largest carrier, industry sources said Friday.

The capital and brokerage subsidiaries of Mirae Asset Group are reportedly looking to set up a leasing firm in the first quarter of 2020 in Singapore, the aviation hub of Asia.

"It will take about three months to review legal and other issues. We are not able to provide other details as of now," a Mirae Asset official said.

The announcement comes about a week ahead of a scheduled signing of a share purchase agreement (SPA) between Kumho Industrial and a consortium led by Mirae Asset and Hyundai Development Company (HDC) to finalize the latter's takeover of Asiana Airlines. Kumho holds a 31 percent stake in Asiana.

This is part of efforts to redefine itself as more of a strategic investor from a mere financial investor, taking a similar path with Hyundai seeking partnership via its subsidiaries to provide services related to aircraft operation including aviation fuel, in-flight catering and insurance.

Thus far, the brokerage subsidiary of the group has dealt with the structured finances concerning the aircraft lease business.

But the group is expected to take a more strategic approach to expand in Asia where high demand is expected for the business amid a rapid increase in the number of overseas travelers, a possible boon.

The new plan aimed at expanding its presence in the global leasing business will help the group diversify its business portfolio via reducing its reliance on the current real-estate-heavy alternative investments.

The capital-strapped, debt-ridden Asiana Airlines, on the other hand, will be able to secure stable financing from the "loaded" investor, thereby substantially lowering liability risks.

Mirae Asset is likely to make gradual payments of over 4.3 trillion won ($4.7 billion) to pay off debt Asiana owes to foreign leasing firms, thereby increasing stakes to control.

The debt was incurred to borrow 83 planes. Part of it includes an annual interest of 500 billion won with a 7 percent interest.

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