The proposed acquisition of South Korean carrier Asiana Airlines by Hyundai Development Company (HDC) from Kumho Industrial has collapsed.

In April 2019, Kumho Industrial reportedly decided to sell its entire stake in Asiana Airlines as part of its plans to secure liquidity and improve its financial structure.

HDC and brokerage Mirae Asset Daewoo agreed to buy a controlling stake in the airline last December. Kumho Industrial is Asiana’s biggest shareholder and the deal totalled around $2.1bn.

The development follows after HDC reportedly sought to renegotiate acquisition terms related to Asiana Airlines in June following the impact of the coronavirus (Covid-19).

As the acquisition now stands cancelled, creditors plan to inject $2bn into Asiana Airlines.

Lead creditor state-owned Korea Development Bank said the creditors will soon relaunch Asiana’s sale, Reuters reported citing the carrier.

Meanwhile, Hyundai Development said in a regulatory filing that it is waiting for a legal review, following which it plans to respond on the deal collapse. However, it blamed that Asiana failed to ‘meet preconditions’.

As at the end of June, Asiana had a total debt of $10bn, according to its regulatory filing.

Since April, the carrier has suspended a majority of its international operations. Its 9,000 employees have also been sent on unpaid leave for 15 days a month.