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Asiana's creditor bank calls for support for Korean Air takeover plan

11/19/2020 | 03:57am EDT
FILE PHOTO: The logo of Korean Airlines is seen on a B787-9 plane at its aviation shed in Incheon, South Korea

SEOUL (Reuters) - Asiana Airline's lead creditor bank called for backing for Korean Air's takeover of the debt-ridden Korean carrier on Thursday in the face of opposition to the plan from some shareholders.

Activist fund KCGI, which is the largest shareholder of Korean Air's parent company Hanjin Kal, said it had filed for a court injunction to prevent it issuing new shares to state-run Korea Development Bank (KDB).

Korean Air announced plans on Monday to spend 1.8 trillion won ($1.62 billion) to become the top shareholder of Asiana, in aviation's first major takeover since restrictions to curb the COVID-19 pandemic decimated air travel.

"This is the only way for our national airline, our international aviation business to survive," KDB chairman Lee Dong-gull told reporters on Thursday.

Labour groups also opposed the planned deal, citing concerns it will lead to loss of jobs at both airlines.

The takeover plan involves KDB investing 800 billion won and taking newly-issued shares to gain a stake of around 11.9% in Hanjin Kal, which will dilute existing shareholders including KCGI, which in March lost a proxy battle with Korean Air chief executive Walter Cho over Hanjin Kal board seats.

"We will not take any sides ... and be a neutral casting vote," said Lee, adding that the deal's importance in saving South Korean airline industry and jobs was comparable to the problems in the shipping industry which led to Hanjin Shipping's bankruptcy in 2016-2017.

KCGI said in a statement on Wednesday 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".

KDB vice president Choi Dae-hyun said that if the court grants the injunction to KCGI, the deal will have to be stopped.

(Reporting by Heekyong Yang and Joyce Lee; Editing by Alexander Smith)

ę Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
ASIANA AIRLINES, INC. 7.17% 17200 End-of-day quote.36.18%
HANJIN KAL -5.70% 74500 End-of-day quote.18.07%
KOREAN AIR LINES CO., LTD. -1.01% 34150 End-of-day quote.25.55%
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Sales 2021 7 475 B 6,68 B 6,68 B
Net income 2021 -66,9 B -0,06 B -0,06 B
Net Debt 2021 10 050 B 8,99 B 8,99 B
P/E ratio 2021 -124x
Yield 2021 -
Capitalization 11 928 B 10 672 M 10 664 M
EV / Sales 2021 2,94x
EV / Sales 2022 2,12x
Nbr of Employees -
Free-Float 68,0%
Duration : Period :
Korean Air Lines Co., Ltd. Technical Analysis Chart | MarketScreener
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Technical analysis trends KOREAN AIR LINES CO., LTD.
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Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 34 250,00 KRW
Last Close Price 34 150,00 KRW
Spread / Highest target 25,9%
Spread / Average Target 0,29%
Spread / Lowest Target -26,8%
EPS Revisions
Managers and Directors
Won-Tae Cho President, Co-Chief Executive Officer & Director
Gi-Hong Woo Co-CEO, Director & Head-Strategy Management
Eun-Yong Ha Senior Managing Director & Head-Finance
Soo-Geun Lee Director & Vice President-Technology
Jae-Il Kim Independent Director
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