Asiana Airlines shares surge on reports parent group to sell stake
SEOUL, April 15 () - Shares in South Korea'sAsiana Airlines 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.
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 .
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.
The parent group is expected to submit a fresh revamp plan after affiliate Kumho Industrial , 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 also surged 30 percent.
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