Korea Development Bank and HDC Hyundai Development Company Face Lawsuit Prospect Over Failed Asiana Airlines Deal

[Asia Economy Reporter Yoo In-ho] HDC Hyundai Development Company is expected to file a lawsuit to recover a performance bond of 250 billion KRW related to the failed acquisition of Asiana Airlines.

According to industry sources on the 13th, the Korea Development Bank (KDB), the main creditor bank of Asiana Airlines, officially declared the failure of HDC Hyundai Development Company's acquisition on the 11th, making a legal battle between the two parties inevitable.

After Kumho Industrial and HDC Hyundai Development Company signed the Share Purchase Agreement (SPA) for Asiana Airlines last December, the unexpected spread of the novel coronavirus (COVID-19) acted as a sudden variable, severely impacting the airline industry and ultimately leading to a no-deal situation.

Accordingly, the two sides are highly likely to engage in a fierce legal dispute over the performance bond amounting to 250 billion KRW.

HDC Hyundai Development Company claims that the responsibility for the failure of the Asiana Airlines deal lies with KDB and Kumho Industrial. Emphasizing the deteriorating financial condition of Asiana Airlines, they requested a re-due diligence on Asiana Airlines and its affiliates on July 24.

According to the Financial Supervisory Service's electronic disclosure system, Asiana Airlines' consolidated debt ratio for the first half of the year was 2291.01%, a sharp increase of 904.32 percentage points from 1386.69% at the end of last year. As of the end of June, the capital erosion ratio was 49.8%, significantly worse than 18.6% at the end of last year.

On the other hand, Kumho Industrial and the creditor group rejected the re-due diligence, stating that sufficient due diligence had already been conducted, and expressed doubts about the HDC consortium's intention to acquire Asiana. They also argued that since the responsibility for the failure of the Asiana Airlines deal lies with HDC Hyundai Development Company, they are confident in the lawsuit.

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