SEOUL (Reuters) – Asiana Airlines’ creditors are working on a financial support plan for the debt-laden South Korean carrier that would target a sale of the airline and its two budget affiliates over the next six months, its main creditor said.
Lee Dong-gull, chairman of Korea Development Bank (KDB), told a briefing on Tuesday that the creditors plan to a come up with a financial plan for the carrier by April 25, with a goal to sign a preliminary deal in late April or early May.
Shares of Asiana jumped by as much as nearly 30 percent to a four-year high on Tuesday, extending their recent rally.
Its top shareholder, Kumho Industrial, said on Monday that it plans to sell its entire 33.5 percent stake, worth 500 billion won ($440.08 million) at Monday’s closing price, to receive creditor support.
The creditors had earlier rejected Kumho’s request to provide support of 500 billion won to the airline, forcing the conglomerate to come up with a plan to immediately sell the crown jewel to get liquidity injection.
KDB’s Lee said creditors plan to provide “enough support” to stabilize Asiana management and regain market trust, without disclosing details.
Lee said it is “desirable” that Asiana should also sell its units, which include two budget carrier arms, Air Busan and Air Seoul.
He said any buyer would still only be able to pay part of Asiana’s debt of more than 3 trillion won.
Shares of SK Networks, a unit of SK Group, were up 6.6 percent on Tuesday afternoon on speculation that the conglomerate may snap up Asiana Airlines. SK Group and Hanwha Group, named as potential buyers in local media reports, have strongly denied interest.
Kumho Asiana Group, Asiana Airlines’ parent conglomerate, has been reeling from its aggressive acquisition spree about a decade ago, which could see the planned sale of the flagship unit created in 1988 ahead of the Seoul Olympics.
In an internal message, Park Sam-koo, who stepped down as Asiana Airlines’ CEO late last month, said the sale was “an inevitable decision to widely cope with difficulties”.
“Asiana was everything to me, as it is to you all,” he said.
(Reporting by Hyunjoo Jin; Additional reporting by Heekyong Yang and Ju-min Park; Editing by Muralikumar Anantharaman)