Korea’s Asiana secures funding following cargo sale decision

05.11.2023 – 23:25 UTC

Korean Air (KE, Seoul Incheon) will buy KRW300 billion won (USD229.2 million) of convertible bonds issued by Asiana Airlines (OZ, Seoul Incheon) in the wake of that airline’s board agreeing to sell its profit-making cargo arm. The 30-year bonds carry an annual interest rate of 4.7% The board’s decision also triggered an immediate KRW150 billion (USD114.6 million) payment to Asiana.

Approval from the November 2, 2023, board meeting helps clear the way for the European Commission to approve the merger of the two airlines. Immediately after the board’s decision, Korean Air reportedly submitted an amended merger proposal to the Europeans and aims to secure their approval by the end of January 2024.

“The two companies have entered into a funding agreement,” said a Korean Air spokesperson after the board meeting. “Accordingly, liquidity support will be provided to Asiana Airlines, and Asiana’s management difficulties will be somewhat resolved. “

Details have also emerged of three days of contentious Asiana board meetings last week. One board member resigned ahead of the first…

Korea’s Asiana Airlines agrees to sell off cargo unit

02.11.2023 – 22:32 UTC

The board of Asiana Airlines (OZ, Seoul Incheon) has, after protracted talks, approved the divestment of its cargo subsidiary as part of its push to gain European Commission (EC) antitrust consent for its proposed merger with Korean Air (KE, Seoul Incheon).

A stock exchange briefing dated November 2 said the proposal had been passed without amendments.

“Our board of directors has requested that the underwriter (Korean Air) submit a report to the European Commission in order to satisfy the prerequisites for closing the transaction related to the new share subscription agreement concluded between the underwriter and the company. We discussed whether to agree to the submitted corrective action plan and passed it as originally proposed,” it said.

However, Asiana highlighted that the divestment would only take place once a new share purchase agreement with Korean Air has been finalised, and not earlier.

The merger still requires US and Japanese regulatory consent.