World Markets

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

Reuters

SEOUL, April 15 () - Shares in South Korea'sAsiana Airlines 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.

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 .

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)


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