[Photo by Yoo Dae-gil = dbeorlf123@ajunews.com]
Last week, the group offered to put Asiana up for sale together with two low-cost carriers in return for an emergency bailout worth 500 billion won. Korea Development Bank (KDB) chairman Lee Dong-gull said Kumho Industrial, the holding company which owns 33.47 percent of Asiana, would turn over its entire stake to a new owner.
"The core of this situation is trust," Finance Minister Hong Nam-ki said Tuesday at a meeting of economy-related cabinet members, adding a reliable self-rescue plan has provided the basis for solving Asiana's crisis.
Of 1.6 trillion won needed to expand Asiana's capital and ease liquidity woes, creditors will buy a perpetual bond worth 500 billion won and provide a fresh loan of 800 billion won, Hong said. A perpetual bond has no maturity date.
KDB said Asiana would also receive 300 billion won in the form of a standby letter of credit (SLOC), which is a bank's commitment of payment to a third party in the event that the bank's client defaults on an agreement.
Separately, the group's express bus business will receive $130 billion in the form of a bridge loan, which is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing. The money will be spent on paying back a short-term loan from nonmonetary institutions.
Asiana has tried to raise money through asset sales, but the airline lost market confidence in April due to its unclear 2018 financial statement, raising concerns about its debt repayment. Kumho Asiana's founder Park Sam-koo abandoned all executive posts at group units on March 28 to take responsibility for causing market disturbances and liquidity woes. The group's ruling family has offered shares and private assets as collateral.
Due to currency-related losses and increased jet fuel costs, Asiana swung to a net loss of 10.4 billion won last year from a net profit of 248 billion won a year ago. Asiana's debt exceeds three trillion won. Asiana controls a 44.17 percent stake in Air Busan, a low-cost regional carrier joint venture with Busan Metropolitan City, and owns 100 percent of Air Seoul, another budget carrier.
