Asiana Airlines shares surge on report of parent group's stake sale

Kumho Engineering & Construction

15/04/2019 02:30

SEOUL, April 15 (Reuters) - Shares in South Korea's Asiana
Airlines  020560.KS  rose more than 25 percent on Monday after
local media reported that its parent group had agreed to sell a
stake in the country's No.2 airline.
    Reports of the stake sale came after Asiana's creditors last
week rejected a restructuring plan drawn up by parent Kumho
Asiana Group.  urn:newsml:reuters.com:*:nL3N21T1B1
    Officials from Kumho Asiana Group and creditors have been
negotiating a fresh restructuring plan since the initial
proposal was turned down, two officials from a main creditor
told Reuters.
    The parent group is expected to submit a fresh revamp plan
after affiliate Kumho Industrial  002990.KS , the top
shareholder in Asiana, holds a board meeting on Monday, the
officials said.
    Shares of Kumho Industrial also jumped 25 percent.
    The Korea Economic Daily said late Sunday that cash-strapped
Kumho Asiana Group had reached an agreement to sell a stake in
Asiana, surrendering to creditors' request for a better
restructuring plan.
    Kumho Industrial holds a 33.5 percent stake worth 385
billion won ($339 million) in Asiana at Friday's closing price.
    Na Chul-hee, a spokesman for Kumho Asiana Group, said Kumho
Industrial planned to hold a board meeting Monday morning, but
did not provide further details.
    South Korea's second-biggest carrier has been struggling to
get its finances in order as it battles rising fuel costs and
competition from low-cost carriers.
    "This is going to be a hot deal, as many local conglomerates
want to get into the airline business so there are expectations
over a coveted takeover deal," said Lee Han-joon, an analyst at
KTB Investment Securities.
($1 = 1,135.3000 won)

 (Reporting by Ju-min Park and Hayoung Choi; Editing by Chris
Gallagher)
 ((ju-min.park@thomsonreuters.com; +82 2 3704 5650; Reuters
Messaging: ju-min.park.thomsonreuters.com@reuters.net))