San-eun and Su-eun Provide 1.7 Trillion KRW in New Funding to Asiana Airlines

[Image source=Yonhap News]

[Asia Economy Reporter Jo Gang-wook] The Korea Development Bank and the Export-Import Bank of Korea will provide an additional 1.7 trillion won in new funding to Asiana Airlines, which is struggling due to the COVID-19 pandemic.

According to financial sources on the 21st, the Korea Development Bank and the Export-Import Bank of Korea held their respective Credit Committee and Expanded Credit Committee meetings on the same day and decided on this additional support for Asiana Airlines.

The support will be provided in the form of a revolving credit line, similar to a "minus account," allowing funds to be drawn as needed.

The burden ratio between the Korea Development Bank and the Export-Import Bank is estimated to be about 7 to 3. In this case, the Korea Development Bank’s support amount will be 1.2 trillion won, while the Export-Import Bank’s portion will be 500 billion won.

Previously, the Korea Development Bank and the Export-Import Bank purchased 500 billion won worth of perpetual bonds issued by Asiana Airlines last year and opened a credit line with a limit of 800 billion won. They also provided a standby LC (Letter of Credit) of 300 billion won, totaling 1.6 trillion won in support. At that time, the burden ratio between the two banks was also about 7 to 3.

Asiana Airlines has so far fully utilized the 800 billion won credit line and recently decided to draw on the 300 billion won standby LC.

As the aviation industry has been hit hard by the COVID-19 crisis, concerns have persisted in the market that HDC Hyundai Development Company’s acquisition of Asiana Airlines might face setbacks. It has been reported that HDC Hyundai Development recently requested support from the Korea Development Bank and the Export-Import Bank regarding Asiana Airlines’ borrowings.

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