After the Kumho Asiana Group put its flagship airline Asiana for sale, the HDC Hyundai Development Corporation announced the signing of a deal finalizing the agreement between the two companies marking a major shift among South Korea’s chaebols.
Following placing the winning bid for the 31% stake in the company worth around KRW 2.5 Trillion (USD $2.2 Billion), the Hyundai group will take over the controlling stake of the airline which currently has been going through a rough financial situation. Asiana currently has a debt worth around KRW 3 Trillion, and HDC will inject around KRW 1.7 Trillion in cash.
The deal will also include Asiana’s budget carrier subsidiaries Air Seoul and Air Busan. Asiana maintains a 100% ownership of Air Seoul, while it has a majority 46% stake in Air Busan.
"We will immediately get into the process of taking over Asiana Airlines to (financially) stabilise the company," Chung Mong-gyu, HDC Hyundai Development chairman, said in a statement.
Since its founding in 1988, Asiana had been a flagship company for the Kumho Asiana Group. Based in Seoul, it has become South Korea’s second largest airline competing with Korean Air along with other budget airlines that have started within the last two decades.