Son Byung-du "Asiana Airlines, Considering All Possibilities Including Nationalization in Discussions"

Son Byung-du, Vice Chairman of the Financial Services Commission, is delivering opening remarks at the Financial Risk Response Team meeting held on the 28th at the Korea Federation of Banks in Jung-gu, Seoul.

[Asia Economy Reporter Kangwook Cho] Sohn Byung-doo, Vice Chairman of the Financial Services Commission, said on the 28th regarding the possibility of nationalization of Asiana Airlines, "We are conducting consultations considering all possibilities."

After the 'Financial Risk Response Team Meeting' held at the Bankers' Hall in Myeong-dong, Seoul, Sohn told reporters in response to questions about the possibility of nationalization following the collapse of HDC Hyundai Development Company's acquisition of Asiana Airlines.

However, he cautioned against overinterpretation, saying, "There is no need to prematurely assume that it will go this way or that way."

Earlier, HDC Hyundai Development proposed a 12-week re-inspection of Asiana Airlines to Kumho Industrial, stating that "the representations and warranties under the contract were not truthful or accurate in important respects, and the conditions precedent to closing the transaction were not met due to clear breaches of commitments."

Although HDC Hyundai Development stated, "There is no change in our intention to acquire Asiana Airlines," the market is doubting their acquisition intent, raising the possibility of the deal falling through. Some speculate that HDC Hyundai Development might be preparing a justification to retrieve the 250 billion won deposit by considering giving up the acquisition.

If the deal collapses, there is a strong possibility of nationalization under the management of creditors such as the Korea Development Bank and the Export-Import Bank instead of a sale. Accordingly, if the M&A fails, Asiana Airlines is expected to undergo intensive restructuring under the creditors to shed non-performing assets for the time being. Even if it attempts to resell Asiana Airlines, it is expected to be difficult to find a buyer easily given the aviation industry's worst management difficulties.

A representative of the main creditor bank, the Korea Development Bank, said, "It is necessary to verify the sincerity of Hyundai Development's acquisition intention."

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