South Korea’s HDC Hyundai Development named as preferred bidder for Asiana Airlines

SEOUL (Xinhua) – A consortium led by South Korea’s construction company HDC Hyundai Development was named yesterday as a preferred bidder to acquire the debt-ridden number two airline Asiana Airlines, according to local media reports.

Among the three bidding consortia on the shortlist, the HDC-Mirae Asset Daewoo consortium was selected as the preferred bidder to acquire a 31 per cent stake in Asiana Airlines and other rights offering.

Kumho Industrial, the construction unit of parent Kumho Asiana Group that held the 31 per cent stake, was quoted as saying it planned to complete its stake sale by the end of this year. The stake sale was expected to include the acquisition of the country’s number two air carrier’s six affiliates, such as budget carriers Air Busan and Air Seoul.

The loss-making Asiana Airlines was put up for sale in April to secure liquidity. As of the second quarter of this year, the carrier’s debt reached 9.6 trillion won (USD8.3 billion), raising the debt-to-equity ratio to 660 per cent.

Funds from the stake sale would be spent on paying debts and investing in new businesses, local reports said.

The 31 per cent stake was valued at about 400 billion won (USD340 million) at Monday’s closing price.