Asiana's Total Issued Shares Expanded Again "In Preparation for Additional Capital Increase"

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 advisory firm Credit Suisse Securities (CS Securities) will conduct the preliminary bidding for the sale of Asiana Airlines on the 3rd. However, the atmosphere surrounding the acquisition 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 Yu Je-hoon] Asiana Airlines plans to hold an extraordinary general meeting of shareholders in June to increase the limit on the number of issued shares once again. This move is interpreted as a measure to strengthen capital to overcome the novel coronavirus disease (COVID-19) crisis and to prepare for the future acquisition process by HDC Hyundai Development Company.

According to the aviation industry on the 7th, Asiana Airlines will hold an extraordinary general meeting of shareholders at its headquarters in Osoe-dong, Gangseo-gu, Seoul on the 15th of next month to propose partial amendments to the articles of incorporation, including ▲revision of the total number of issued shares ▲revision of the convertible bonds (CB) issuance limit.

Asiana Airlines held an extraordinary general meeting and an annual general meeting in June last year and March this year, respectively, to expand the CB issuance limit (700 billion KRW) and increase the total number of issued shares (800 million shares). These measures were taken with the financial support from the Korea Development Bank, the acquisition and merger (M&A) by HDC Hyundai Development Company, and the expansion of issued shares due to a rights offering in mind.

Regarding this additional expansion measure, Asiana Airlines explains that it is to prepare for capital expansion to overcome the COVID-19 crisis. In fact, recently, KDB Korea Development Bank and the Export-Import Bank of Korea agreed to provide liquidity to Asiana Airlines through a credit line of approximately 1.7 trillion KRW. If the situation worsens, additional support and fundraising may follow.

However, within the industry, there is also an interpretation that this increase in the total number of issued shares is intended with HDC Hyundai Development Company's M&A in mind. HDC Hyundai Development Company initially postponed the rights offering of Asiana Airlines scheduled for early April and has also deleted the scheduled stock acquisition date of April 30.

An Asiana Airlines official stated, "Convertible bonds and others are commonly used methods in the market to promote capital expansion," adding, "We proceeded with the amendment considering that additional capital expansion may be necessary depending on the development of COVID-19, but the detailed contents have not been finalized."

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