The sale of Asiana Airlines is expected to be a competition between the Aekyung and HDC Hyundai Development Company consortiums as the KCGI-BankerStreet PE consortium failed to find a strategic investor. Aekyung’s consortium partners are Stonebridge Capital and Korea Investment & Securities while HDC Hyundai Development Company’s partner is Mirae Asset Daewoo.
The tender that started on Nov. 7 is related to Kumho Engineering and Construction’s 68,688,063 Asiana Airlines shares and common stocks to be issued by Asiana Airlines. According to industry insiders, Asiana Airlines acquisition is estimated to require at least 1.5 trillion won to 2.5 trillion won considering the old shares worth 450 billion won, new shares worth 800 billion won, management premium, and subsidiary value.
The Aekyung consortium is expected to prepare the money based on Aekyung’s equity investment, Stonebridge Capital’s project fund (400 billion won to 800 billion won) and Korea Investment & Securities’ acquisition financing (at least 500 billion won).
If Aekyung takes over Asiana Airlines, the number of its airplanes will increase to around 160 and it will become the largest airline in South Korea with an international flight market share of 45 percent and a domestic flight market share of 48 percent.
HDC Hyundai Development Company, in the meantime, has accumulated cash for a while for new business opportunities. In the first half of this year, its cash, cashable assets and short-term financial assets topped 1.6 trillion won.
Both HDC Hyundai Development Company and Mirae Asset Daewoo are excellent in financing. In addition, HDC Group’s duty-free shops and Mirae Asset Group’s global hotel networks are expected to create synergy with Asiana Airlines. Also, it is said that the owners of the two companies are very willing to take over the airline.
Kumho Engineering and Construction is planning to select a preferred bidder within this month and sign a stock sale agreement by next month to finish the sale within this year.