HDC Hyundai Development and Kumho Industrial in Conflict over Sale of Asiana Airlines

HDC Hyundai Development and Kumho Industrial are at odds over the former’s acquisition of Asiana Airlines, increasing the chances of negotiations on sale of the airliner collapsing.

HDC Hyundai Development said on July 30 that it will conduct another round of due diligence in August before deciding to take over Asiana Airlines. "We express serious concern over Kumho Industrial’s unilateral moves towards terminating the transaction," HDC Hyundai Development said. "We propose that creditors observe the second due diligence or conduct joint due diligence with us."

HDC Hyundai Development believes that due to a change in the business environment brought by the spread of new coronavirus, another round of due diligence is needed to check the company’s situation and analyze the causes of its poor performance. In particular, HDC stressed that the request for the second due diligence was not a move intended to take back the down payment.

Kumho Industrial, the largest shareholder of Asiana Airlines, said on the same day that it would refuse to allow the second due diligence, asserting that HDC Hyundai Development was shirking its responsibility for the closure of the deal. "We addressed HDC Hyundai Development’s claims several times, and unless HDC Hyundai Development fulfills its obligations to seal the deal, we will hold HDC Hyundai Development responsible for the delay," Kumho Industrial said. "HDC Hyundai Development is distorting facts and avoiding the conclusion of the deal, shifting the responsibility to Kumho Industrial and Asiana Airlines. We ask HDC Hyundai Development to cooperate in the process of closing the transaction with a sincere attitude."

Meanwhile, as HDC Hyundai Development and Kumho Industrial are playing a ping pong game over the acquisition of Asiana Airlines, KDB chairman Lee Dong-gull told reporters that he would clarify the creditors’ position on the matter next week.