Asiana receives $2B injection from S. Korea after HDC deal fails
South Korea plans to inject $2 billion (2.4 trillion won) to Asiana Airlines after the carrier’s acquisition deal between its parent company Kumho Industrial and Hyundai Development Company (HDC) failed on September 11, 2020.
The joint investment of 2$ billion will come from the Korea Development Bank (KDB) and another state-owned lender Export-Import Bank of Korea. The two companies would most likely become Asiana’s biggest shareholders after the injection.
Initially, HDC and Mirae Asset Daewoo agreed with Kumho Industrial to acquire a stake in Asiana Airlines for $2.1 billion (2.5 trillion won) in December 2020. The deal reportedly collapsed after Hyundai Development called for renegotiations due to Asiana’s surging debt over the impact of COVID-19.
Reportedly, Asiana lost $225 million (268 billion won) in the first half of 2020. But even before, the airline was not a profitable project to begin with as it finished 2019 with a $660 million (785 trillion won) in net losses.
As of June 2020, the carrier has surmounted a total debt of 12.8 trillion won ($10.8 billion), a 33% increase from the previous year.
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