South Korea will give KRW1 trillion won (USD840 million) of its KRW40 trillion (USD33.6 billion) long-term industry stabilisation fund to Korean Air (KE, Seoul Incheon) through the issue of government-guaranteed bonds, starting from the end of June, Yonhap News Agency has reported.

The government has decided to prioritise the air and shipping industries, which have sustained direct hits from the coronavirus pandemic and which will continue to struggle into the second half of 2020, an unidentified government official said after a Korea Fair Trade Commission meeting on June 7.

The flag carrier has already received KRW1.2 trillion (USD1 billion) in aid from two state-run financial institutions, the Korea Development Bank and the Export-Import Bank of Korea, for its needs in the first half of 2020.

But it has KRW3.32 trillion (USD2.8 billion) in debt maturing this year, which may rise to KRW4 trillion (USD3.3 billion) if investors of its hybrid bonds exercise their right to early payment, according to Yonhap.

Meanwhile, Seoul's metropolitan government has proposed a KRW467.1 billion (USD392 million) sum to Korean Air to buy the company's 37,000-square-metre plot of land in Songhyeon-dong, central Seoul, to turn it into a "cultural park", it announced on June 6.

The city will pay a 10% down payment to Korean Air in 2021 once the final purchase price is confirmed, and transfer the rest in 2022, local media reported. However, Korean Air has not commented on the plan. Real estate insiders have estimated the market price of the land at KRW500 billion to KRW600 billion (USD420-500 million).

The airline had previously planned to sell the land by September, but that plan appeared to have stalled. Several other potential buyers were reportedly interested in a public sale of the site, but the municipality has said that the site must not be developed for purposes other than a park.