The biggest South Korea’s airline and flag carrier Korean Air will proceed with its planned Asiana Airlines acquisition. The airline has won the approval of the majority of its shareholders to sell new shares in order to finance the purchase on January 6, 2021. The latest amendment allows the air carrier to make a step further into the acquisition.
Despite the negative vote from the National Pension Service (NPS) with an 8.11% stake in Korean Air, the vast majority of Korean Air shareholders approved to amend the company’s articles of association to increase the total number of its shares from the current limit of 250 million to 700 million.
With the amendment approved, Korean Air will be able to proceed with a sale of new shares worth W2.5 trillion ($2.3 billion) by mid-March, a financing that will fund a purchase of 60% of Asiana Airlines.
In a statement, Korean Air said that it has formed a committee of experts that will help with the integration of two carriers. The plan is to aim for approval of a business combination by mid-January and to finish post-merger integration by mid-March.
In December 2020, Seoul Central District Court rejected a request filed by Korea Corporate Governance Improvement (KCGI), asking the Court to issue an injunction prohibiting the sale of Korean Air parent company’s Hanjin KAL stock to Korea Development Bank (KDB). If the Court had ruled in favor of KCGI’s request, that would have blocked Korean Air from Asiana Airlines takeover.