The creditor banks of Asiana Airlines, including Korea Development Bank (KDB), have re-extended a memorandum of understanding (MOU) on financial structure improvement with the ailing carrier for another year.
KDB also signed a separate MOU with Asiana Airlines at the end of last month to provide additional financial support. The Export-Import Bank of Korea (Korea Eximbank) will sign a similar MOU with Asiana at the end of this month. KDB and Korea Eximbank will provide a total of 1.60 trillion won (US$1.37 billion) to Asiana Airlines, with KDB accounting for 70 percent of the total. Other creditors, including commercial banks, have decided not to offer additional financial support.
Five creditor banks, including KDB, signed an agreement to re-extend the MOU on Asiana Airlines’ financial structure improvement for another year on May 3. This came after they temporarily extended the MOU for a month on April 25 due to the repayment of 60 billion won (US$51.24 million) worth of perpetual bonds.
A KDB official said, “We have asked the remaining four creditors, which do not participate in the MOU, to extend the existing bonds and offer a ‘revolving service’ which allows a certain proportion of credit balances to be paid off in flexible installments.”
When financial support is provided as planned, the sale of Asiana Airlines is expected to gain pace. Asiana has chosen CS Securities as the lead manager for the sale and due diligence will be carried out for nearly two months. Creditors, including KDB, look to sell off Asiana Airlines within this year.
A KDB spokesperson said, “It is urgent to sell the firm early and change the majority shareholder. To this end, we are planning to sell off Asiana Airlines shares in our own way in case the ongoing sale process fails to find a buyer.”