Korean Air is selling its in-flight catering and duty-free businesses and has signed a memorandum of understanding with local private equity fund, Hahn & Company.

The investment firm describes itself as “specialising in buyouts and corporate restructurings in South Korea”, according to its website.

Korean said in a statement today that the move was decided at a 7 July board meeting, and the transacting parties will discuss details of the deal later, including follow-ups such as due diligence.

It adds: “Korean Air will do everything it can to ensure job security of its employees in these business sectors, and will communicate closely with the labour union.”

In the same statement, Korean reiterates its decision to sell assets “to overcome the prolonged crisis caused by the Covid-19 pandemic”.

The company will also raise W1.13 trillion ($940 million) from the issue of 79.4 million new shares this month, at a final issue price determined to be W14,200 on 6 July. This increases the gross proceeds by about 13% from the initial target announced on 13 May, to raise W1 trillion from the same number of shares at W12,600 each.