Korean Air (KE, Seoul Incheon) has signed a deal to sell its inflight catering and duty-free business to Seoul-based private equity firm Hahn & Company for KRW990.6 billion won (USD834 million) as part of its “self-help efforts” and scramble for capital amid the coronavirus crisis.

A Korean Air board meeting approved the asset sale on August 25 before signing a “business transfer agreement” with Hahn on the same day, the company said in a statement.

The business will be transferred to a new company that the private equity firm has yet to establish, and the flag carrier will then acquire a 20% stake in that company “to secure a stable supply of its inflight meals and inflight duty-free products and high-quality service,” the statement explained.

It will take two to three months to close the deal. Korean Air expects to enter into an inflight meal supply contract and an inflight duty-free product sales contract with the new company before the transaction closes.

Hahn & Company, which has KRW8.1 trillion (USD6.8 billion) in assets under management according to Yonhap News Agency, recently completed due diligence on the unit.

As previously reported, the sale of this lucrative core asset is part of an agreement reached in April with the Korea Development Bank and the Export-Import Bank of Korea to access KRW1.2 trillion (USD1 billion) in fresh liquidity from the two state-run banks.

In that agreement, the carrier is required to secure KRW2 trillion (USD1.7 billion) in self-help measures. It recently raised about KRW1.1 trillion (USD926 million) in funding in a rights offering.

It is also in the process of selling other assets, such as a plot of land in Songhyeon-dong, central Seoul, and shares in Wangsan Leisure Development, which operates the Wangsan Marina close to Seoul Incheon airport. However, the Songhyeon-dong sale process is experiencing difficulties due to a unilateral move by the City of Seoul to designate it as a cultural park.