Hyundai Development seeks new terms on Asiana Airlines acquisition

South Korean firm Hyundai Development Company (HDC) is reportedly seeking to renegotiate acquisition terms related to Asiana Airlines.

Last November, a consortium formed by HDC and Mirae Asset Daewoo was shortlisted as the preferred bidder to buy a stake in Asiana Airlines.

The consortium is planning to purchase a 31% stake in the carrier from Kumho Industrial in a $2.1bn deal. The commitment was announced by Asiana in late December last year.

The deal consisted of buying Asiana’s current shares and new shares investment. It was originally intended to be closed in April; however, it has been postponed indefinitely.

A local news agency Maeil Business News Korea was cited by Reuters as saying that the call for renegotiation follows as the carrier’s already existing debt burden increased by around $3.8bn.

As of the end of March, the carrier’s total debt accumulated to KRW13.2tn (nearly $11bn).

The carrier employs around 10,000 employees. Korea Development Bank is Asiana Airlines’ lead creditor.

Korea Investment & Securities analyst Choi Go-woon was quoted by Reuters as saying: “If the deal fails, Asiana would likely be adrift for one to three years before it finds a new owner and Korea Development Bank will have to take the lead in restructuring.”