Owner of Korean Air in talks to acquire Asiana Airlines: sources

Logos of Korean Air Lines and Asiana Airlines

Hanjin Group, which owns South Korea's top flag carrier Korean Air Lines, is mulling acquiring the country's No. 2 carrier Asiana Airlines Inc., sources here said Thursday.

Hanjin Group is in talks with the state-run Korea Development Bank, the main creditor of Asiana, to buy the debt-ridden carrier, the sources said.

"The KDB first came up with the idea, and they have been negotiating for about two months," a source familiar with the matter said.

A KDB official said a deal with Hanjin is among various options under consideration but that nothing has been determined at this moment. A Hanjin Group official also said the news cannot be confirmed.

The two sides are reportedly discussing a plan under which the KDB will inject funds to Hanjin KAL, the holding company of Hanjin Group, and then the group will use that money to buy a 30.77 percent stake in Asiana.

The reported plan can make the KDB the third-largest shareholder in Hanjin KAL and help Hanjin Group finance the acquisition deal, the sources said.

In September, Asiana's creditors -- the KDB and the Export-Import Bank of Korea -- decided to end a drawn-out deal to sell the cash-strapped air carrier as they failed to iron out differences over acquisition terms with HDC Hyundai Development amid the coronavirus outbreak.

The HDC-led consortium initially signed the deal to acquire Asiana from Kumho Industrial as well as new Asiana shares to be issued and the carrier's six affiliates for 2.5 trillion won ($2.1 billion).

But HDC later demanded a renegotiation with Kumho and the creditors over the terms and another round of due diligence on Asiana to reflect the COVID-19 pandemic's impact on the industry. The demand was rejected by the creditors. (Yonhap)