SEOUL (Reuters) – South Korean creditors plan to provide 1.6 trillion won ($1.40 billion) in financial support to debt-laden Asiana Airlines Inc, the country’s finance minister said on Tuesday, alleviating liquidity problems after a bruising month.
Asiana Airlines’ biggest shareholder earlier this month said it would sell its entire stake worth 564 billion won as of Monday’s closing share price, in response to creditors’ rejection of an earlier request for support of 500 billion won.
Creditors have now offered to buy Asiana Airlines’ perpetual bonds worth 500 billion won and set a credit limit of 800 billion won, among other conditions, said Minister of Economy and Finance Hong Nam-ki.
Speaking at a meeting, Hong also said creditors wanted top shareholder Kumho Industrial Co Ltd to sell its stake within this year.
State-funded Korea Development Bank, the lead creditor of Asiana Airlines – the country’s second-biggest carrier after Korean Air Lines Co Ltd – declined to comment.
A spokesman for the parent group of both Asiana and Kumho Industrial said it will “do its utmost” to sell Asiana Airlines, adding that it expects to sign a preliminary deal with creditors later on Tuesday.
Shares of Asiana Airlines and budget affiliate Air Busan Co Ltd, like those of across the industry, have been falling since crude oil prices reached six-month highs.
On Tuesday, Asian Airlines fell 4.6 percent, whereas Air Busan lost 5.8 percent. Kumho Industrial fell 3.6 percent.
In March, auditors raised doubts about Asiana’s financial statements, after which the airline reported steeper losses and bigger debts, triggering warnings of credit-rating downgrades. Co-Chief Executive Park Sam-koo resigned to take responsibility.
($1 = 1,139.9000 won)
(Reporting by Hyunjoo Jin and Cynthia Kim; Editing by Jacqueline Wong and Christopher Cushing)