Korean Air Lines (KAL) says it will take over rival Asiana Airlines in a state-backed deal aimed at helping South Korea's two largest airlines survive the coronavirus pandemic, Nikkei reports.
KAL announced on Monday that it will purchase newly issued shares in Asiana for 1.5 trillion won, equivalent to approximately 11.7 billion kronor, and corporate bonds for an additional 300 billion won. This will give KAL a 63.9 percent stake in Asiana. To finance the deal, KAL will raise 2.5 trillion won from its shareholders.
State-owned Korean Development Bank (KDB) has announced that it is helping with the deal by investing 800 billion won in KAL's parent company Hanjin KAL, capital that will be used to buy new shares in KAL.
”"We realized that without restructuring in the aviation industry, it is uncertain whether airlines would survive until after the corona pandemic," KDB said in a statement.
