Hyundai Development (HDC) is looking to renegotiate its acquisition of a 31% stake in Asiana Airlines from Kumho Industrial.
This has been sparked by an increase in Asiana’s debt burden and HDC appealed to the airline’s state-funded creditors to offer it support, Reuters reported on 9 June.
HDC has notified Kumho and Korea Development Bank, one of Asiana’s creditors, to push back the long-stop date to review and renegotiate terms, according to a report by local news agency Maeil Business News Korea.
In November 2019, Kumho selected the consortium formed by HDC and Mirae Asset Daewoo as the preferred bidder for its stake in Asiana.
Asiana announced on 27 December that the consortium had committed to a W2.5 trillion ($2 billion) deal, which involves acquiring existing Asiana shares and investing in new shares issued by the airline and its affiliates.
The parties had targeted a completion date of end-April, but HDC said in a 29 April stock exchange disclosure that this had been postponed indefinitely.
None of the parties involved were avialable to comment.
So far this year, Asiana has disclosed W600 billion in new short-term borrowings from financial institutions, some as part of government aid through state-backed lenders.
In February, the company received bridge loans, each W100 billion from KB Securities, Shinhan, and Korea Investment & Securities. In March, it secured a W215 billion credit line from Korea Development Bank and from Korea Eximbank, W84.8 billion.
The company also extended a W30 billion short-term loan to low-cost subsidiary Air Seoul, from 8 June to 27 January 2021, at 4.6% interest and repayable every quarter. This is in addition to a W10 billion loan extended in March.
A previous version of this story cites amounts in trillions in the last two paragraphs. This has been updated.