SEOUL, Nov 17 (NNN-YONHAP) – Korean Air Lines, South Korea’s biggest air carrier, will acquire the country’s debt-ridden second-biggest air carrier, Asiana Airlines, it was reported yesterday, state-owned Korea Development Bank (KDB), as saying.
The KDB, one of the major creditors of the debt-laden airline, will invest in 500 billion won (450.9 million U.S. dollars) of shares, and 300 billion won (270.5 million U.S. dollars) of exchangeable bonds, to be sold by Hanjin KAL, a holding company of airline conglomerate, Hanjin Group.
Hanjin KAL will lend the raised fund of 800 billion won (721.4 million U.S. dollars) to Korean Air, to help its affiliate take over Asiana Airlines, while purchasing 731.7 billion won (659.8 million U.S. dollars) of stocks, out of the combined 2.5 trillion won (2.3 billion U.S. dollars) in shares, to be issued by Korean Air for the acquisition.
Korean Air will acquire 1.5 trillion won (1.4 billion U.S. dollars) of new shares and 300 billion won (270.5 million U.S. dollars) of perpetual bonds, to be issued by Asiana Airlines. After the acquisition, Korean Air’s stake in Asiana Airlines is expected to rise to 63.9 percent.
After the completion of the acquisition, Korean Air planned to integrate three low-cost carriers among Korean Air’s Jin Air, and Asiana Airlines’ Air Busan and Air Seoul in a gradual manner.– NNN-YONHAP
