Korea Development Bank: "Korean Air to Receive Additional Support Next Month... 800 Billion Won Needed by Year-End"

Received 'Management Stability' Commitment Regarding Hanjin Kal Management Rights Dispute
Even if Songhyeon-dong Site Sale Fails, No Overall Contract Damage Expected

On the 26th, when KDB Industrial Bank and Korea Eximbank finalized the plan to support Korean Air with 1.2 trillion won, Korean Air passenger planes were parked at the Gimpo Airport apron in Gangseo-gu, Seoul. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kangwook Cho] Korea Development Bank (KDB) will provide additional funding next month to Korean Air, which is experiencing financial difficulties due to the COVID-19 pandemic. The additional funding is expected to be at least 800 billion KRW.

Choi Dae-hyun, Vice President of KDB's Corporate Finance Division, stated during the 'Major Issues Online Briefing' held on the 17th, "We will provide additional support to Korean Air through the Industrial Stabilization Fund early next month."

Vice President Choi explained, "According to simulations, Korean Air is expected to require an additional 800 billion KRW by the end of the year, in addition to the existing support of 1.2 trillion KRW."

Regarding the management rights dispute of Hanjin KAL, the parent company of Korean Air, he said that a commitment to stabilize management rights has been secured. This clause is included in the 1.2 trillion KRW support agreement.

Concerning the ongoing sale of the Songhyeon-dong site in Seoul by Korean Air, he said, "Korean Air proposed this as a capital expansion plan, but since it is land, there are concerns about whether the sale can proceed at the expected price due to the economic situation."

However, Vice President Choi evaluated, "Even if the sale is delayed, we have made an agreement to sufficiently cover it through other means," adding, "Even if the sale does not go through, it will not affect the overall agreement."

Regarding KDB becoming the second-largest shareholder of Korean Air through the acquisition of convertible bonds, he explained, "Since this support was provided before the establishment of the Industrial Stabilization Fund, a certain portion of convertible bonds had to be included," and added, "In the future, upon business normalization, the direction will be to share profits."

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