Asiana Airlines Creditors: "Hyundai Steel Construction Must Reassess, But Significantly Shorten the Period"

Asiana Airlines, caught in a stalemate between HDC Hyundai Development Company and its creditors that stalled the sale process, held an extraordinary general meeting on the 15th to initiate capital expansion. On this day, Asiana Airlines convened the extraordinary general meeting at its headquarters in Gangseo-gu, Seoul, and approved an amendment to the articles of incorporation to increase the total number of issued shares and the issuance limit of convertible bonds (CB). The photo shows the Asiana Airlines headquarters where the extraordinary general meeting was held. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kangwook Cho] Regarding the sale of Asiana Airlines, where concerns about a 'no deal' (No deal·acquisition failure) are growing, HDC Hyundai Development Company (Hyundai Development) is considering a new proposal to conduct a re-due diligence but significantly shorten the period.

According to the financial sector on the 2nd, the creditors, including the Korea Development Bank, are reportedly reviewing a counterproposal to significantly shorten the period in response to Hyundai Development's demand for a '12-week re-due diligence of Asiana Airlines.'

Earlier, Hyundai Development demanded in a press release on the 26th of last month that Kumho Industrial, the seller, and the creditors conduct a '12-week re-due diligence of Asiana Airlines.' This was due to the situation having changed significantly since the contract was signed in December last year because of the COVID-19 pandemic.

However, the market is sending suspicious views that Hyundai Development might use the re-due diligence results as a card to back out of the acquisition. There are criticisms that the sincerity of the acquisition is in doubt as Hyundai Development has not accepted face-to-face negotiations requested several times and is only engaged in document disputes with Kumho.

However, if the acquisition of Asiana Airlines fails, the lack of suitable alternative buyers amid the COVID-19 situation deepens the creditors' concerns. This is why a plan to selectively and concisely conduct re-due diligence focusing only on essential items among those pointed out by Hyundai Development, such as the sharp increase in debt and borrowings and the rise in net losses, is being considered.

Kumho Industrial sent a letter to Hyundai Development on the 28th of last month stating that the contract could be terminated after August 12. Therefore, if it ultimately ends in a 'no deal,' a lawsuit over the return of the 250 billion won performance bond is inevitable.

Amid the tense standoff between the two sides, the Korea Development Bank is expected to announce its position on the Asiana Airlines acquisition issue within this week.

Lee Dong-gul, chairman of the Korea Development Bank, said on the 30th of last month regarding Hyundai Development's request for re-due diligence and the Asiana Airlines sale issue, "We will express (the bank's) position next week."

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