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[Alpha Biz=(Chicago) Reporter Kim Jisun] Korean Air's plan to merge Asiana Airlines is deepening as the U.S., the European Union, and Japanese rival authorities continue to delay the screening of the business combination.
Amid controversy over the sale of Asiana's cargo transport sector as rival authorities are concerned about weakening competitiveness in the cargo transport sector, some say the merger could fall through in the worst-case scenario if the state-run Korea Development Bank, the main body of the sale, fails to accept it.
Korean Air says the sale of Asiana's cargo division is groundless and will continue to make efforts with the aim of final approval by rival authorities.
In the aviation industry on the 7th, Korean Air is reportedly considering selling Asiana Airlines' cargo division in connection with the EU competition authorities' review of the business combination. Asiana Airlines' cargo division is a key business unit that accounted for 72.5% of Asiana Airlines' air transportation sales in 2021.
In particular, creditors such as the Korea Development Bank and the Export-Import Bank of Korea provided 1.2 trillion won in funds through the acquisition of permanent bonds to support Korean Air's merger with Asiana Airlines. The Korea Development Bank and the Export-Import Bank of Korea acquired 500 billion won in perpetual bonds issued by Asiana Airlines in 2019 and provided a total of 1.6 trillion won, including 800 billion won in limit loans and 300 billion won in Standby LC (guarantee letter of credit).
Korean Air is in talks with rival authorities such as the U.S., the EU and Japan to merge with Asiana Airlines and is in a position to make efforts for final approval.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
