Asiana Airlines Resolves 3-for-1 Free Capital Reduction... Acquisition Battle 'Smooth Sailing'

Approval Rate 96%

Asiana Airlines, expected to renegotiate the acquisition with HDC Hyundai Development Company, held an extraordinary general meeting of shareholders on the morning of the 15th at its headquarters in Osoe-dong, Gangseo-gu, Seoul, where it resolved to increase the total number of shares to be issued and the limit of convertible bonds for capital expansion. After the shareholders entered, employees were removing the guide signs. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Yu Je-hoon] Asiana Airlines' proposal for a free capital reduction has passed at the extraordinary general meeting of shareholders. This paves the way for Korean Air's acquisition of Asiana Airlines to proceed smoothly.

According to the aviation industry on the 14th, Asiana Airlines resolved the capital reduction (a 3-for-1 free equal capital reduction) at the extraordinary general meeting held at its headquarters in Osoe-dong, Gangseo-gu, Seoul. Shareholders with 41.8% voting rights participated in the meeting, and the proposal passed with 96.1% approval.

Following this resolution, Asiana Airlines will carry out a 3-for-1 free capital reduction on the 28th, merging three registered common shares with a face value of 5,000 KRW each into one common share with the same face value. As a result, Asiana Airlines' capital will decrease from 1.1162 trillion KRW to 372.1 billion KRW, and the total number of issued shares will reduce from 223.2 million shares to 74.41 million shares.

Accordingly, the largest shareholder, Kumho Industrial, will see its holdings decrease from 68.68 million shares to 22.89 million shares, and the second-largest shareholder, Kumho Petrochemical, will reduce from 24.59 million shares to 8.19 million shares. Initially, Kumho Petrochemical opposed the equal capital reduction plan, but considering the ongoing acquisition by Korean Air, it appears they did not actively exercise their voting rights against the proposal.

Meanwhile, the approval of this free capital reduction proposal has also accelerated Korean Air's acquisition of Asiana Airlines. Korean Air is preparing to form a due diligence team for Asiana Airlines and plans to acquire 300 billion KRW worth of Asiana Airlines' perpetual convertible bonds (CB) by the end of this month, completing a total capital injection of 600 billion KRW (including a 300 billion KRW deposit). Korean Air also intends to increase the issuance limit of shares through an extraordinary general meeting in January next year and secure funds for acquiring new shares of Asiana Airlines through a paid-in capital increase in March.

Reporter Yu Je-hoon kalamal@

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