San-eun: "Hyunsan, didn't receive it? We provided sufficient data"

Hyunsan Officially Refutes Key 'Acquisition Status' Reinspection Request

Asiana Airlines, expected to enter renegotiations for acquisition with HDC Hyundai Development Company, held an extraordinary general meeting of shareholders on the morning of the 15th at its headquarters in Osoe-dong, Gangseo-gu, Seoul, where it resolved to increase the total number of shares to be issued and the limit of convertible bonds for capital expansion. After the shareholders entered, employees were removing the guide signs. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Jo Gang-wook] The Korea Development Bank (KDB) officially refuted the claim that it did not receive reliable official data from HDC Hyundai Development Company (HDC Hyundai) by stating that it provided sufficient explanatory materials.

On the 17th, KDB released reference materials addressing and refuting point-by-point the major "acquisition situations" for which HDC Hyundai requested a fundamental re-examination.

Earlier, on the 9th, HDC Hyundai requested a recheck through a press release, citing "situations confirmed and occurring after the contract signing with Asiana Airlines."

Regarding the claim that Asiana Airlines' debt increased by 4.5 trillion KRW since last year, KDB stated, "The main cause was changes in accounting standards related to lease liabilities and maintenance provisions, and the amount was somewhat overestimated."

Although debt increased by 2.8 trillion KRW from the end of June last year to the end of the year, the increase was mainly due to book liabilities unrelated to cash flow (lease liabilities of 1.4 trillion KRW and maintenance provisions of 600 billion KRW, mileage liabilities of 100 billion KRW due to changes in interpretation and estimates of standards) and a 400 billion KRW increase in borrowings due to poor business conditions.

Additionally, while HDC Hyundai estimated the creditors' support of 1.7 trillion KRW entirely as an increase in debt, KDB clarified that this was a credit line, with only 500 billion KRW supported as of the end of May, and it was also used for repaying other debts, so borrowings did not increase net.

KDB explained, "These situations are not limited to Asiana Airlines but are due to the overall aviation industry's poor performance caused by deteriorating Korea-Japan relations, the US-China trade dispute, and COVID-19, as well as foreign currency valuation losses from exchange rate increases at settlement."

Regarding Samil Accounting Corporation's expression of an "adverse" opinion on Asiana Airlines' internal accounting control system, KDB emphasized, "This is unrelated to the reliability of the financial statements."

KDB explained, "This has a completely different meaning from the audit opinion on the financial statements, and the audit opinion on the financial statements was appropriate, so there is no problem with the reliability of the financial statements."

In response to the criticism that the creditors approved the new support of 1.7 trillion KRW at Asiana Airlines' board meeting without HDC Hyundai's consent, KDB said, "We understand that Asiana Airlines provided sufficient prior explanation," adding, "This support was an essential measure by the creditors to maintain the going concern, but since HDC Hyundai did not agree, it proceeded without their consent."

KDB further stated, "HDC Hyundai did not express a decision to confirm the acquisition but did not agree due to concerns about debt increase, lack of data, and the need to prepare countermeasures for changes in management control shares upon conversion of the creditors' perpetual bonds into stock."

Finally, regarding HDC Hyundai's claim that it did not receive reliable official data, KDB firmly stated, "We believe sufficient explanatory materials were provided."

KDB emphasized, "Asiana Airlines has responded multiple times through official letters and related materials to HDC Hyundai's requests, and we understand that the acquisition team stationed at Asiana Airlines headquarters has been regularly provided with information and has faithfully supplied materials whenever requested by the acquirer."

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