Russia’s Review Likely to Be Completed Next Week
The creditors of Asiana Airlines are expecting HDC Hyundai Development to resume the indefinitely postponed acquisition process for the ailing airline soon, predicting that Russia’s corporate combination review, which was delayed due to the COVID-19 crisis, will be completed next week.
"There is no reason for Russia to delay the corporation business review because HDC’s acquisition of Asiana Airlines does not involve the possibility of a monopoly in the aviation industry," said an industry analyst. "If the review is completed, all the prerequisites for the acquisition will be met, and HDC Hyundai Development will have no excuse to delay the takeover." As a result, the creditors are expected to check HDC Hyundai Development’s intention to acquire the airline immediately after the completion of the review, and if there is no response, they will start official procedures such as sending official documents.
On the other hand, HDC Hyundai Development is delaying its final decision as Asiana Airlines has been hit directly by the COVID-19 crisis. Asiana Airlines’ operating loss amounted to 208.2 billion won in the first quarter of 2020, sharply increasing from 11.8 billion won in the first quarter of 2019. Its debt ratio also surged from 1,387 percent in the first quarter of 2019 to 6,280 percent in the first quarter of 2020.
However, if HDC makes a final decision to acquire Asiana Airlines, it will shift its main business from construction to aviation, and leap to 17th place from 33rd in the Korean corporate rankings. Asiana Airlines is expected to create synergies with HDC Group's duty-free shops and hotels. Some analysts speculate that HDC Hyundai Development’s indefinite delay in acquiring Asiana is aimed at putting pressure on the creditors to come up with additional support. Yet the creditors say they can discuss changing contract terms or giving additional support only after HDC Hyundai Development makes a final decision to acquire the airline.
The creditors do not rule out the collapse of the sale process. In this case, Asiana Airlines will be placed under the creditors’ control. "It may not be easy for HDC Hyundai Development to give up on Asiana Airlines because it needs to diversify its business areas," an industry source said. "There is a possibility that HDC Hyundai Development will proceed while coordinating the timing and conditions of the acquisition."