Asiana Airlines shares surge on reports parent group to sell stake (updated)

Kumho Engineering & Construction

15/04/2019 03:59

* Asiana shares hit highest intraday level since July 2015
    * Cash-strapped Kumho Asiana Group working on fresh revamp
plan

 (Adds background, bourse request)
    SEOUL, April 15 (Reuters) - Shares in South Korea's Asiana
Airlines  020560.KS  jumped 30 percent on Monday to their
highest in more than three years after local media reported that
its parent group had decided to sell a one-third stake in the
carrier.
    Reports of the stake sale came after Asiana's creditors last
week rejected a restructuring plan drawn up by its financially
troubled 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.
    Under the rejected plan, the family-controlled conglomerate
had requested 500 billion won ($440 million) in financial
support and would have sold the crown-jewel airline unit only if
its restructuring had failed after three years.
    A groupwide liquidity crisis came to light last month when
Asiana and a group affiliate failed to get auditors to sign off
on their annual reports.
    The accounting fiasco threatened Asiana's liquidity position
and led the chairman of Kumho Asiana Group to step down from his
posts at Asiana and another affiliate.  urn:newsml:reuters.com:*:nL3N21F1DH
    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. 
    Asiana Airlines shares climbed to their highest intraday
level since July 2015. Shares of Kumho Industrial also jumped,
by 25 percent.
    The Korea Exchange asked Asiana and Kumho Industrial to
clarify media reports on the stake sale by 6 p.m. Seoul time
(0900 GMT).
    The Korea Economic Daily reported late Sunday that the
cash-strapped group had reached an agreement with creditors to
sell Kumho Industrial's 33.5 percent stake in Asiana. The stake
would be worth 385 billion won ($339 million) based on Friday's
closing price.
    Kumho Asiana Group's former chairman, Park Sam-koo, is the
top shareholder of the holding company Kumho & Company
Incorporation, which has a 45 percent stake in Kumho Industrial.
    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.
    Asiana, South Korea's second-biggest carrier by sales, 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.
    Shares in Asiana's low-budget carrier affiliate Air Busan
 298690.KS  also surged 30 percent.

 (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))