Hyundai Development-led group picked for S.Korea's Asiana stake (updated)
12/11/2019 05:31
(Adds Kumho comment in par 5, background)
SEOUL, Nov 12 (Reuters) - A consortium led by South Korean
construction firm Hyundai Development Co 294870.KS has been
picked as the preferred bidder for a controlling stake in Asiana
Airlines 020560.KS , the firms said on Tuesday.
The airline's top shareholder, Kumho Industrial, put up its
31.05% stake for sale as it came under pressure from Asiana
creditors to reduce debt at the loss-making carrier.
The consortium of Hyundai and brokerage Mirae Asset Daewoo
006800.KS offered nearly 2.5 trillion won ($2.2 billion) for
the stake, new shares to be issued by Asiana, and interests in
the airline's two budget carriers and other affiliates,
according to media reports.
The offer scuppered a rival 2 trillion won bid from a group
led by budget airline Jejuair's 089590.KS parent Aekyung, the
reports said.
Kumho did not disclose the offer price but said the
Hyundai-led consortium was the "most qualified candidate to help
normalise Asiana's management and secure its competitiveness in
the mid and long term".
South Korean airlines are struggling to be profitable and
keep lid on debt as they deal with rising competition from
budget rivals, falling tourism traffic between South Korea and
Japan, higher fuel costs and unfavourable currencies.
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Shares in Asiana jumped 7.7% following the announcement.
(Reporting by Heekyong Yang and Hyunjoo Jin; Editing by Himani
Sarkar and Stephen Coates)
((Heekyong.Yang@thomsonreuters.com; +82 2 6936 1470;))