HDC Hyundai Development Requests 12th Reinspection Again, Will Asiana Airlines Acquisition Fail?

[Asia Economy Reporter Yoo In-ho] HDC Hyundai Development Company has repeatedly conveyed to the Korea Development Bank (KDB) its position that a 12-week re-due diligence is necessary regarding the acquisition of Asiana Airlines. Kumho Industrial, the seller, is reportedly expected to notify HDC Hyundai of contract termination as early as this week.

According to financial sources on the 3rd, HDC Hyundai reportedly expressed to the creditors, including KDB, through an email the day before that it demands a 12-week re-due diligence.

They maintained their existing stance that re-due diligence is necessary as the situation has significantly changed since the contract was signed last December due to the COVID-19 pandemic and other factors.

After Lee Dong-gull, chairman of KDB, and Chung Mong-gyu, chairman of HDC Group, held a final negotiation on the acquisition of Asiana on the 26th of last month, HDC Hyundai has been deliberating over the acquisition conditions.

It is known that Chairman Lee proposed a plan for the creditors to ease HDC Hyundai’s acquisition burden, considering the COVID-19 situation, during the meeting.

The plan reportedly also included maintaining the perpetual bonds and convertible bonds issued by Asiana Airlines as capital.

However, as HDC Hyundai has brought up the re-due diligence card for Asiana Airlines again, which the creditors had already rejected, there is speculation that the acquisition contract for Asiana Airlines may ultimately fall through. There is also a possibility that Kumho Industrial, the selling party, will notify contract termination as early as during this week.

A creditor official said, “Even though Chairman Lee and Chairman Chung met, they could not reach a conclusion, so there is nothing more that can be done. The M&A with HDC Hyundai should be considered over, and Kumho Industrial, the negotiating party, will soon notify contract termination.”

If the deal is finally canceled, Asiana Airlines will enter a creditor management system, and the government will consider injecting the Industrial Stabilization Fund into Asiana Airlines. Although the long-term plan is to pursue resale, it is difficult to find an alternative buyer due to the uncertain aviation industry situation caused by COVID-19.

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