SEOUL, Jul. 24 (Korea Bizwire) — Kumho Asiana Group, a South Korean airline-to-petrochemical conglomerate, looks set to begin the process of selling its airline unit this week as part of broad restructuring efforts, industry sources said Wednesday.
“The group is likely to give a public bidding notice on Thursday or Friday to sell its entire 33.5 percent stake in Asiana Airlines Inc. held by its construction unit Kumho Industrial Co.,” a person familiar with the matter told Yonhap News Agency.
The airline stake up for sale is valued at 448 billion won (US$380 million) based on Wednesday’s closing price. Asiana shares jumped 6 percent to 6,520 won, far outperforming the broader KOSPI’s 0.9 percent decline.
If the management premium is added, the acquisition price reportedly could be at least 1 trillion won and as much as 2.5 trillion won.
The accounting firm Ernst & Young has conducted due diligence on Asiana Airlines.
It remains to be seen whether Credit Suisse, the sole advisor to the deal, will send proposal requests to companies who appear to have an interest in acquiring the airline, he said.
When contacted by Yonhap, Credit Suisse declined to comment.
Conglomerates such as SK, CJ, Hanwha and Aekyung have been mentioned as potential bidders for the country’s second-biggest full-service carrier after Korean Air Lines Co., though they have denied the rumors or said they will look at the deal.
In 2018, Asiana Airlines and its main creditor, the state-run Korea Development Bank (KDB), signed a deal that required the carrier to secure liquidity through sales of assets and other means.
The KDB-led creditors and Kumho Industrial have said they are planning to sell Asiana Airlines together with its two budget carrier units — Air Seoul Inc. which is wholly owned by the airline and 46-percent owned Air Busan Co.
But they left room for the possibility that Asiana and the two low-cost carriers could be sold separately if such a request arises during the bidding process.
Last year, the airline swung to a net loss of 10.4 billion won from a net profit of 248 billion won a year earlier due to currency-related losses and increased jet fuel costs.
It owes financial institutions a total of 2.7 trillion won in short-term obligations, with 660 billion won of loans maturing this year.