August 07, 2020 11:06
HDC Hyundai Development is inching closer to scrapping the acquisition of troubled flag carrier Asiana Airlines, warning Thursday that the airline's parent company will be to blame if the deal falls through.
The property developer on Thursday again demanded another 12 weeks' due diligence and said, "Kumho Industrial and Asiana will be wholly responsible for the cancellation of the contract."
The statement came after Asiana's main creditor, state-owned Korea Development Bank, on Monday said HDC must decide by Aug. 11 whether it wants to buy the airline or not and there is no call for further due diligence.
But HDC said, "The present crisis at Asiana was clearly caused by mismanagement by Kumho Industrial and a failure to abide by contract terms."
"We must express serious concern over KDB's refusal to conduct another due diligence and seeking to pass the blame to HDC instead of Asiana and parent Kumho Industrial," it added.
The property developer, which has formed a consortium with Mirae Asset Daewoo for the acquisition, claims that Asiana has incurred an additional W46 billion in costs since the contract was signed after raising around W1.76 trillion in capital by issuing new stocks and bonds and borrowing money (US$1=W1,186).
It insists that the original seven weeks' due diligence was insufficient because Asiana provided "very limited documents" to hide losses.
But industry watchers believe HDC has already made up its mind to back out of the W2.5 trillion deal and is trying to build a favorable case in the event of a lawsuit to get back its W250 billion down payment.
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