Korean Air Sells In-flight Meal Tray Business for 990.6 Billion KRW... Acquires 20% Stake in New Corporation

by Yoo Jaehoon

Published 25 Aug.2020 17:25(KST)

[Asia Economy Reporter Yu Je-hoon] Korean Air is selling its in-flight meal and in-flight sales business unit, known as the "goose that lays golden eggs," for about 1 trillion won. This move is aimed at securing liquidity amid the COVID-19 pandemic. At the same time, Korean Air plans to acquire a 20% stake in the newly established in-flight meal tray business corporation to maintain a stable supply chain.

On the 25th, Korean Air announced that it signed a business transfer agreement to sell the in-flight meal tray business to the private equity firm Hahn & Company. Prior to this, Korean Air held a board meeting at its Seosomun office in Jung-gu, Seoul, to review and approve the matter.

The sale price for the in-flight meal tray business unit is 990.6 billion won, and the business will be transferred to a newly established corporation set up by Hahn & Company. Korean Air plans to acquire a 20% stake in the new corporation to ensure stable supply of its in-flight meals and duty-free products and to maintain high-quality service levels.

According to Korean Air, the transaction is expected to take about 2 to 3 months to complete. Before the closing date, Korean Air also plans to sign supply contracts for in-flight meals and sales contracts for in-flight duty-free products with the new corporation.

Meanwhile, on July 7, Korean Air signed a memorandum of understanding (MOU) granting exclusive negotiation rights to Hahn & Company to promote the sale of its in-flight meal and in-flight duty-free sales businesses, and has since undergone detailed due diligence and negotiations.

A Korean Air official explained, "Based on the business transfer agreement with Hahn & Company, we are making efforts to successfully complete the transaction and plan to closely cooperate to ensure the stable operation of the new corporation’s business."