Sep. 11--SEOUL -- The planned takeover of the second-largest South Korean airline, Asiana Airlines, by a local consortium has fallen through in light of the pandemic's effect on the airline's financial situation.
The creditors of Asiana's parent company, Kumho Asiana Group, informed the consortium led by the construction company Hyundai Development that the contract will be cancelled, the state-owned Korea Development Bank (KDB) said on Friday.
According to reports by the Yonhap news agency, the KDB and the Export-Import Bank of Korea plan to provide a further 2.4-trillion-won (2-billion-dollar) injection to keep Asiana Airlines afloat.
In June, the consortium had called for renegotiations in view of the consequences of the coronavirus pandemic on Asiana's operations.
The group of companies had signed a contract for the acquisition of 30.77 per cent of the highly indebted Star Alliance member in December. The buyers were ready to invest 2.5 trillion won in the already existing and newly issued shares, and in management rights.
The Kumho Asiana Group agreed to sell shares in its most important subsidiary in spring 2019 due to financial problems.
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