Korean Air (KE, Seoul Incheon) has decided to press ahead with a plan to sell its lucrative inflight catering business to secure liquidity, Business Korea reported on June 5.
Credit Suisse, which was brought in to estimate the value of the carrier's assets, also including its SKYPASS loyalty programme and MRO division, will send letters with the relevant investment information to potential buyers within the coming week.
However, the mileage and maintenance units remain off the to-do list for now, and a plan to sell a parcel of land in Songhyeon-dong, central Seoul, has also stalled.
"We understand that [South Korean food, pharmaceuticals, and media conglomerate] CJ Corporation is the company most keenly interested in Korean Air's inflight meal business, which is considered a 'hot deal' for the second half of in 2020," an investment banking insider enthused. "We expect food and distribution companies, including CJ, to compete for the unit."
As previously reported, Korean Air parent Hanjin KAL has been mulling the sale of the three core business units to potentially net up to KRW3 trillion won (USD2.5 billion) in much-needed cash for the company as part of its self-rescue measures.
The carrier's catering business, which provides an average of 71,000 meals a day, recorded KRW350 billion (USD290 million) in revenue last year to generate an operating profit of KRW30 billion (USD25 million).
However, Korean Air cautioned: "We requested Credit Suisse to assess the value of Korean Air's assets after the liquidity crisis erupted, but we have yet to officially sign a contract with it for the sale of the inflight meal business."
Late last month, Korean Air said it would decide whether to sell its catering, mileage, and MRO units by the end of June and submit a formal proposal for the sale of the businesses to creditors in early July.
