Most A380s right now are in storage or are being phased out, but Korean Air recently reactivated one of the 10 in its fleet from Seoul to Guangzhou
Creditors’ plan to sell debt-laden Asiana Airlines to its bigger rival Korean Air faces a bumpy road as a local equity fund has filed an injunction against the plan, according to a report by Yonhap News.
On 17 November, Asiana’s main creditor, state-run Korea Development Bank (KDB), signed an investment agreement with Korean Air’s parent holdings company Hanjin KAL to inject 800 billion won (US$723 million) into Hanjin KAL through a rights offering and convertible bonds. Hanjin KAL will then participate in a 2.5 trillion-won (US$2.24 billion) stock sale by Korean Air for the purchase of Asiana.
A day later, the homegrown equity fund Korea Corporate Governance Improvement (KCGI), representing an alliance with Korean Air chairman’s elder sister, Cho Hyun-ah, filed an injunction against the KDB’s plan to join Hanjin KAL’s rights issue, saying the share sale to the third party will damage the Hanjin Group holding firm’s existing shareholders’ value.
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During a press conference, KDB Executive Director Choi Dae-hyon insisted Hanjin KAL’s planned share sale to the designated party is aimed at injecting money into the cash-strapped Asiana through Korean Air by the year’s end.
The director said Cho Won-tae, chairman of Hanjin KAL and Korean Air, signed and agreed to step down if the merger reports poor earnings under his leadership.
The KDB, Hanjin KAL and the chairman also agreed to not allow any family members in management roles within Hanjin KAL and its airline affiliates.
This measure to keep the management in check would see the chairman’s younger sister Cho Hyun-min relieving her chief marketing officer post at Hanjin KAL.
The KDB’s comments come as a three-party alliance led by the chairman’s elder sister Cho Hyun-ah, known for her “nut rage” incident in 2014, took issue with the Asiana takeover plan.
Chairman Cho, 44, had sparred with Hyun-ah, 45, when she formed the alliance with KCGI and local builder Bando Construction in January who failed to dethrone the chairman and perhaps will make another coup attempt at Hanjin KAL’s shareholders meeting in March next year, the report read.
KCGI said on 18 November that Hanjin Kal’s board of directors had “rushed to issue new shares without any process of collecting shareholders’ opinions or even due diligence on Asiana Airlines’ financial condition,” Reuters reported.
If the court accepts the fund’s injunction request, South Korea’s hopes of consolidating its airlines could once again disappear in thin air, leaving Asiana back under the control of its creditors.
In September, Asiana’s creditors ended a drawn-out deal to sell the embattled airline to a consortium led by HDC Hyundai Development Company due to differences over terms of the 2.5 trillion-won deal amidst the pandemic.
