Korean Air, the flag carrier of South Korea, announced on Monday that it will buy its small, troubled rival Asiana Airlines for $ 1.6 billion to integrate with the coronavirus pandemic that is shocking the global aviation sector.
Global travel restrictions imposed to prevent the spread of the disease have caused havoc in the aviation industry and have hit Asiana Airlines, which was already in trouble.
“The main reason behind Korean Air’s decision to buy Asiana Airlines at this time is to stabilize the Korean aviation industry, which is suffering from the Covid-19 pandemic,” Korean Air said in a statement. It was.
“Once Korean Air completes the acquisition of Asiana Airlines, the airline is expected to be ranked one of the top 10 airlines in the world.”
Korean Air said it will pay Asiana Airlines 1.8 trillion won using cash from the 2.5 trillion won rights issue issued earlier next year.
The agreement also includes Asiana Airlines affiliates such as low-cost carriers Air Seoul and Air Busan.
“Given that a prolonged COVID-19 situation could jeopardize Korean Air’s financial position, it will re-establish the domestic aviation market to increase its competitiveness and minimize the injection of public funds. It is inevitable to build it, “added a statement from Korean Air.
Asiana Airlines has been plagued by financial problems for a long time, and its parent company, Kumho Industrial, put up a 31% stake last year under pressure from creditors.
The previous deal for South Korean builder HDC Hyundai Developer to buy Asiana Airlines collapsed in September as a pandemic struck the aviation industry.
Asiana Airlines reported an operating loss of 268 billion won in the first half of this year, and its debt surged to 11.5 trillion won.
Korean Air To Take Over Troubled Asiana Airlines For $1.6 Bn Source link Korean Air To Take Over Troubled Asiana Airlines For $1.6 Bn