Asiana Acquisition Funding... HDC Hyundai Development Company, 400 Billion Won Paid-in Capital Increase

"Partial Paid-in Capital Increase Decided to Reduce Interest Expenses"
Major Shareholder HDC Also to Participate in Paid-in Capital Increase
Plan to Issue Corporate Bonds Worth 300 Billion KRW

On the 2nd, one day before the preliminary bidding for Asiana Airlines, an Asiana Airlines passenger plane is taking off from the runway at Incheon International Airport. According to the aviation industry and investment banks, Kumho Industrial and the sales lead manager Credit Suisse Securities (CS Securities) will conduct the preliminary bidding for the sale of Asiana Airlines on the 3rd. However, the mood of the acquisition battle is lukewarm. The decline in the growth rate of the aviation industry and the deterioration of Asiana Airlines' financial structure are the biggest obstacles. Photo by Kim Hyun-min, Yeongjongdo kimhyun81@

[Asia Economy Reporter Han Jinju] HDC Hyundai Development Company is raising 400 billion KRW to secure the acquisition funds for Asiana Airlines.

On the 10th, HDC Hyundai Development held a board meeting and resolved to issue 21,969,110 new shares worth 409.5 billion KRW through a rights offering followed by a general public offering of forfeited shares. The shares to be issued this time account for 50% of the total issued shares (43,938,220 shares). The issue price is 18,550 KRW per share, and the payment date is March 13. The final issue price will be confirmed on March 2.

HDC Hyundai Development decided to raise part of the funds through a paid-in capital increase to reduce borrowing and cut interest expenses in the process of securing funds necessary for the acquisition of Asiana Airlines. Previously, the consortium of Hyundai Development Company and Mirae Asset Daewoo agreed to invest 2.5 trillion KRW, with Hyundai Development Company bearing about 2 trillion KRW of that amount.

As of the third quarter of last year, HDC Hyundai Development holds approximately 1.4 trillion KRW in cash equivalents and net cash of 726.7 billion KRW. The debt ratio based on separate financial statements stands at about 109.6%.

HDC Hyundai Development stated, "Even if borrowings increase by about 1.1 trillion KRW due to the acquisition of Asiana Airlines, the debt ratio will be managed at around 130% through this paid-in capital increase," adding, "We will secure about 2 trillion KRW in acquisition funds by raising 400 billion KRW through the paid-in capital increase, 300 billion KRW through corporate bond public offerings, 500 billion KRW in cash on hand, and 800 billion KRW through other financing methods."

Additionally, the major shareholder HDC plans to participate in the paid-in capital increase soon after a board resolution as part of responsible management for the acquisition of Asiana Airlines. Apart from this 400 billion KRW paid-in capital increase, HDC Hyundai Development will also issue 300 billion KRW worth of public corporate bonds.

HDC Hyundai Development, in consortium with Mirae Asset Daewoo, signed a stock purchase agreement and a new share subscription agreement with Kumho Industrial and Asiana Airlines respectively on the 27th of last month. The Hyundai Development consortium plans to pay the acquisition funds by April 30.

This content was produced with the assistance of AI translation services.