Press reports from South Korea say that three consortia have joined a final auction to acquire Kumho Industrial’s 31% stake in Asiana Airlines, the country’s number 2 carrier, and its
affiliates.
The stake is worth about 365 billion won (US$315.28 million) at current prices, but analysts believe the price could grow sharply to 2 trillion won (US$1.7 billion), as the buyer will
also take on new shares issued by the loss-making carrier, plus a premium.

Kumho Industrial parent Kumho Asiana Group expects to select a preferred bidder in about a week and complete the sale by the end of 2019, South Korea’s Yonhap news agency reported.
Kumho Asiana earlier indicated it wants to sell the 31% stake as part of broader restructuring efforts. The six affiliates involved as part of the deal include two budget carriers: Air Seoul,
which is wholly owned by Asiana, and Air Busan, which is 46% owned by Asiana.
The Aekyung-Stonebridge consortium, the Hyundai Development Co (HDC) and Mirae Asset Daewoo consortium, and the Korea Corporate Governance Improvement (KCGI) and BankerStreet private equity
consortium submitted their final bids to deal manager Credit Suisse last Thursday.

Only one bidder has long-standing experience in aviation
Aekyung and HDC, which have been seen as the frontrunners, reportedly presented acquisition prices of around KRW1.5 trillion won (US$1.3 billion) and KRW2.5 trillion (US$2.16 billion),
respectively, according to Yonhap.
“News reports that HDC has submitted a price that is far higher than Aekyung’s appear to have helped drive up Asiana’s and its affiliates’ stock prices,” Park Hee-chul, an analyst at Mirae Asset
Daewoo, an investment bank, told Yonhap.
Commenting on the price difference, Aekyung has stressed that it is the only bidder with 13 years of experience in operating an airline, as Aekyung Group parent AK Holdings holds a 56.9% stake in
budget carrier Jeju Air. The Group said acquiring Asiana would allow its airlines to achieve economies of scale and reduce redundancies.

Nol van Fenema

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