This photo taken on Dec. 1, 2020, shows an Asiana passenger jet taking off from the Incheon International Airport against the background of Korean Air planes in Incheon, just west of Seoul. (Yonhap)
SEOUL, Jan. 6 (Korea Bizwire) — Korean Air Lines Co., South Korea’s biggest carrier, said Wednesday its shareholders approved a plan to change the company’s articles of association to help finance its planned acquisition of smaller rival Asiana Airlines Inc.
In an extraordinary shareholders’ meeting, 70 percent of the Korean Air stakeholders voted for the amendment of the articles of association ahead of its 2.5 trillion-won (US$2.3 billion) rights issue plan set for March to sell more stocks aimed at funding the acquisition, the company said in a statement.
The amendment raised the upper limit of the national flag carrier’s shares to 700 million from the current 250 million before the share sale in mid-March, it said.
Out of the rights issue proceeds, Korean Air plans to spend 1.8 trillion won to take over Asiana, the country’s second-biggest carrier.
The company began conducting due diligence on Asiana early last month to look into Asiana’s cost structure, contracts and other details as it is scheduled to come up with a post-merger integration plan by March 17, Korean Air President Woo Kee-hong said last month.
To proceed with the deal, Korean Air plans to submit documents to antitrust authorities in the countries to which the carrier flies by Jan. 14 for review of the merger.
The countries include the United States, the European Union, China and Japan.
Korean Air expects no major problems in obtaining approval from overseas for the merger of the two airlines given that bigger merger deals went smoothly in the past.
Korean Air and Asiana account for a combined 40 percent of passenger and cargo slots at Incheon International Airport, South Korea’s main gateway. It does not constitute a monopoly, the company said.
The two airlines have suspended most of their flights on international routes since March as countries strengthen their entry restrictions to stem the spread of the pandemic.
From January to September, Korean Air’s net losses narrowed to 651.84 billion won from 707.14 billion won a year earlier as it focused on winning more cargo deals to offset dried-up travel demand.
But Asiana’s net losses widened to 624 billion won in the first nine months from 524 billion won a year ago.
The carriers are expected to release their fourth-quarter and 2020 earnings results next month.
(Yonhap)
