Korean Air to Sell Airport Bus Business to Private Equity Fund

by Kim Hyojin

Published 30 Nov.2020 18:29(KST)

As the court's decision on Korean Air's acquisition of Asiana Airlines approaches, on the 30th, Korean Air and Asiana Airlines passenger planes were moving toward the runway at Gimpo Airport apron in Gangseo-gu, Seoul. The Seoul Central District Court is expected to deliver a ruling on the injunction request filed by activist private equity fund KCGI against Hanjin KAL to prohibit new share issuance either today or tomorrow. If the court dismisses the injunction request, the acquisition process will accelerate, but if the injunction is granted, the acquisition is likely to be canceled. Photo by Kim Hyun-min kimhyun81@

As the court's decision on Korean Air's acquisition of Asiana Airlines approaches, on the 30th, Korean Air and Asiana Airlines passenger planes were moving toward the runway at Gimpo Airport apron in Gangseo-gu, Seoul. The Seoul Central District Court is expected to deliver a ruling on the injunction request filed by activist private equity fund KCGI against Hanjin KAL to prohibit new share issuance either today or tomorrow. If the court dismisses the injunction request, the acquisition process will accelerate, but if the injunction is granted, the acquisition is likely to be canceled. Photo by Kim Hyun-min kimhyun81@

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[Asia Economy Reporter Kim Hyo-jin] Korean Air is selling its airport bus business operated by its subsidiary to a private equity fund.


According to industry sources on the 30th, Korean Air's subsidiary, Aviation Comprehensive Service, signed a memorandum of understanding (MOU) earlier this month with private equity firm Keystone Partners for the sale of its Kalimujin business division.


Aviation Comprehensive Service recorded sales of 43.1 billion KRW and an operating loss of 2.4 billion KRW last year. It is reported that management difficulties have worsened recently due to a decrease in airport passengers caused by the impact of the novel coronavirus disease (COVID-19).


The sale is expected to be completed early next year, with the sale price estimated to be between 20 billion and 30 billion KRW.


Keystone Partners has experience acquiring 100% of Kumho Express shares and part of Seoul Express Bus Terminal shares from Kumho Industrial in 2012.


On the same day, Korean Air selected Kansas and Mirae Asset Daewoo as the preferred negotiation candidates for the sale of Wangsang Leisure Development.


Wangsang Leisure Development, wholly owned by Korean Air, operates Wangsang Marina, a leisure facility in Yeongjongdo, Incheon.


The sale of Wangsang Leisure Development is expected to be completed in the first quarter of next year, with the sale price at 130 billion KRW.


Korean Air also plans to secure an additional 41.9 billion KRW through the sale of idle assets such as company housing in Jeju Yeondong.

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