In recent time, the major financier of Asiana Airlines—second-biggest carrier of South Korea—stated that it will sell its complete stake in the debt-ridden company to keep it floating, driving shares of the airline and its budget section 30% higher. The move tops weeks of economic insecurity involving the carrier that started in the last month when it missed getting auditors’ sign-off on its 2018 economic statements, initiating warnings of credit rating declines and the resignation of the group’s chairman. Since that its shares have grown more than double, as its top financier Kumho Industrial vowed to sell the airline to decrease the airline’s debt, raising anticipations for possible takeover interest.
However, the reconstruction plan was abandoned by creditors in the past week for not being adequate to reinstate market trust in the obliged carrier that has $3 Billion (3.4 Trillion won) in short-term commitments counting 1.3 Trillion won of loans evolving in this year. In a refurbished proposal, Kumho–that possess one-third of Asiana—stated it will sell the whole stake and also bid the 500 Billion won possession as security to creditors for interim loans. Lee Han-joon—Analyst at KTB Investment Securities—said, “This is going to be a special offer, as several local conglomerates need to get into the airline industry so there are anticipations regarding a coveted takeover deal.”
Recently, Asiana Airlines was in news as the liquidity was at jeopardy on junk rating caution. The apprehensions about Asiana Airlines’ liquidity is increasing after two rating companies cautioned its debt score might be curbed to junk owing to a lack of lucidity in its 2018 financial report. The airline’s BBB rating—which is the lowest investment-grade level—was presented on negative evaluation by KIS (Korea Investors Service) and NICE Investors Service after Asiana got a “skilled” opinion for its yearly report from its auditor.