The Covid-19 pandemic looks to have disrupted another airline deal in South Korea.
HDC Hyundai Development Co’s planned takeover of Asiana Airlines Inc has been postponed indefinitely and the deal could be on the verge of collapse, according to sources.
HDC Hyundai and partner Mirae Asset Daiwoo agreed to buy a 76% stake in cash-strapped Asiana.
This week it announced a delay to closing the deal just a day before it was due to complete the transaction.
Although the reason given is a delay in receiving regulatory approval in Russia, local media reported HDC Hyundai has been putting pressure on Asiana creditors to amend the terms as the airline’s fortunes continue to worsen due to the Covid-19 pandemic.
It has apparently being asking creditors to extend the Asiana’s loan repayment deadline, and wants to see a cut in the interest rates, among other concessions.
Regulators in the US, China, Kazakhstan, Uzbekistan, Turkey and South Korea have already approved the acquisition.
The HDC-Mirae Asset Daewoo consortium had planned to invest up to KRW2.18 trillion in new shares to help strengthen the airline’s balance sheet, as well as restructure the business through various cost-cutting measures.
Mirae itself is embroiled in legal action after it recently backed out of a deal to buy a multi-billion dollar portfolio of US luxury hotels from China’s Ambang Insurance.
Just a few days ago, South Korean low cost carrier Jeju Air announced its planned acquisition of rival Eastar Jet had hit some turbulence due to a delay in receiving final approval from foreign regulators.
