July 27, 2020 12:21
Property developer HDC Hyundai Development has asked Asiana Airlines to conduct another due diligence, saying the cash-strapped carrier failed to live up to its end of the acquisition deal.
HDC on Sunday said it sent a notice to Asiana and parent Kumho Industrial to launch a 12-week due diligence review on its assets in mid-August.
The ominous demand comes a week after Jeju Air reneged on a deal to acquire rival budget carrier Eastar Jet, raising jitters that the HDC-Asiana deal may also fall through.
HDC said it requested the fresh study based on an external auditor pointing out Asiana's unsound fiscal status because the carrier's debts increased by W2.8 trillion even as it intends to borrow another W1.7 trillion to stay afloat amid the coronavirus epidemic (US1=W1,203).
HDC also said it is worried about Asiana's financial support for struggling affiliates and losses from a private equity fund.
It added that it sent 15 separate reminders to Asiana since early April informing the carrier of new areas of concern that need to be addressed but Asiana failed to provide adequate documents.
Asiana accused HDC of deliberately delaying the acquisition, which HDV dismissed as "distorting the truth." Main creditor Korea Development Bank is to discuss the matter on Monday.
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