South Korea’s antitrust watchdog, the Korea Fair Trade Commission, has approved the acquisition of a 61.5% stake in Asiana Airlines (OZ, Seoul Incheon) by Hyundai Development Co (HDC), the regulator said on April 3. But HDC has asked for financial support to complete the deal.

HDC signed the agreement to buy the shareholding on December 27, reporting it to the regulator on January 30.

“There is no concern about substantially limiting competition,” the commission said in a statement posted on its website. “The FTC judged that the major business sectors of the combined parties - civil engineering and air transport - differ so that there is no danger the merger would limit competition in the market.”

The commission added that it conducted its investigation “as quickly as possible in view of the situation facing the aviation industry, which is struggling with Covid-19.”

However, according to the Korea Times, as South Korea’s second-biggest carrier struggles to deal with its worst-ever crisis - its share price has halved since the start of the outbreak - HDC is expected to delay the legal procedures finalising the deal until the second half of this year.

In self-rescue measures unveiled in March, Asiana said it told all of its 10,500 employees to take unpaid leave for 15 days in April and executives to return 60% of their salaries.

HDC has requested financial support in relation to the acquisition from two state-owned institutions, Korea Development Bank (KDB) and the Export-Import Bank of Korea, Business Korea magazine reported.

Hyundai wants the KDB to convert the KRW500 billion won (USD407 million) worth of Asiana's perpetual bonds the bank has acquired into loans, or to reschedule the repayment of loans taken from the banks. Last year, the two banks provided a total of KRW1.6 trillion (USD1.3 million) to the carrier.

HDC signed the acquisition deal for KRW2.5 trillion won (USD2 billion), which is three times Asiana Airlines' current market value. As the main creditor bank, Korea Development Bank has said it is willing to offer financial assistance if HDC makes specific requests to close the deal, according to the Korea Times.