South Korean real estate and construction giant Hyundai Development Co revealed on November 12 that its consortium together with brokerage Mirae Asset Daewoo had been chosen as the preferred bidder for a controlling 31.05% stake in Asiana Airlines (OZ, Seoul Incheon). It also pledged to inject over KRW2 trillion won (USD1.7 billion) of fresh capital into the indebted carrier.

The airline currently has debts of KRW9.6 trillion (USD8.22 billion) as it faces an uphill battle against low-cost carriers and falling traffic to Japan, Reuters reported.

“Asiana will achieve the industry’s top-class financial health,” Chung Mong-gyu, Hyundai Development chairman, said at a press conference. “We will make steady efforts to improve its competitiveness and corporate value by investing in new aircraft and services.”

Hyundai offered KRW2.5 trillion (USD2.16 billion) for the stake, which also includes new shares to be issued by Asiana, as opposed to KRW1.5 trillion (USD1.3 billion) offered by Aekyung Group whose parent AK Holdings holds a 56.9% stake in Jeju Air (7C, Jeju).

Chung did not discuss the offer price but said that the consortium was likely to inject over KRW2 trillion won into the carrier. He added that Mirae Asset Daewoo would pay 20% of the acquisition costs.

Stake seller Kumho Industrial Co commented that the Hyundai consortium was “analysed as the most qualified buyer to put Asiana's business back on track and secure its mid- and long-term competitiveness”.