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Deals

Creditors to inject $2 billion into Asiana Airlines after sale collapses

FILE PHOTO: An Asiana Airlines Airbus A350-900 is seen at the Airbus delivery center in Colomiers near Toulouse, France, March 20, 2019. REUTERS/Regis Duvignau/File Photo

SEOUL (Reuters) - Creditors plan to inject $2 billion into debt-ridden Asiana Airlines 020560.KS after a planned sale of South Korea's second-largest carrier collapsed, a state bank said on Friday.

Kumho Industrial 002990.KS pulled the 2.5 trillion won ($2.11 billion) sale of the South Korean to Hyundai Development Co 294870.KS and brokerage Mirae Asset Daewoo 006800.KS.

They had agreed to buy control of Asiana in December, but called for better terms after the airline’s debt surged in subsequent months after the coronavirus pandemic tore through markets and wiped out demand for travel.

Asiana CEO Han Chang-soo said it was necessary to preserve Asiana Airlines as a going concern. State-run lead creditor Korea Development Bank said creditors will relaunch Asiana’s sale as soon as conditions permit.

Hyundai Development plans to respond after legal review, it said in a regulatory filing, adding that the deal fell apart due to Asiana’s failure to meet preconditions.

Mirae Asset said it will respond according to future progress as a financial investor.

Asiana, which competes with bigger Korean Air Lines 003490.KS, had a total debt of 12.8 trillion won as of end-June, up more than 33% from a year earlier, according to its regulatory filing.

($1 = 1,186.4800 won)

Reporting by Joyce Lee and Heekyong Yang; Editing by David Clarke, Muralikumar Anantharaman and Louise Heavens

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