The Korea Development Bank and the Export-Import Bank of Korea have decided to recover the entire public funds of 1.38 trillion won injected into Asiana Airlines within the first quarter of this year.
According to the financial sector on the 17th, the Korea Development Bank reported this public funds recovery plan to the financial authorities and the National Assembly. The total public funds injected by the Korea Development Bank and the Export-Import Bank of Korea for the normalization of Asiana Airlines from 2019 to 2020 amount to 3.6 trillion won. The Korea Development Bank supported 2.37 trillion won, the Export-Import Bank provided 930 billion won, and the remaining 300 billion won was contributed from the Period Industry Stabilization Fund. The Period Industry Stabilization Fund is a fund created by the Korea Development Bank to support national key industries that faced difficulties due to COVID-19.
Asiana Airlines repaid 180 billion won in 2022, 940 billion won in 2023, and 1.1 trillion won in 2024. The total repayment amount is 2.22 trillion won.
As the merger between Korean Air and Asiana Airlines proceeds smoothly, it appears that the government is hastening the recovery of public funds. In December of last year, Korean Air acquired 131,578,947 new shares (equity ratio 63.9%) of Asiana Airlines through a third-party allocation of new shares, becoming the largest shareholder. The sale price was 1.5 trillion won, and it seems that Asiana Airlines will use this money for the repayment of public funds.
The Korea Development Bank provided 800 billion won to Hanjin KAL, which is the holding company of Korean Air, in 2020 to promote the acquisition of Asiana Airlines. The timing and method of recovering these funds are undecided.
The Korea Development Bank is expected to first review whether the post-merger integration (PMI) proceeds without issues. The investment agreement at that time specified seven obligations that Hanjin KAL must fulfill, one of which is to "establish and implement a post-merger integration (PMI) plan for Asiana Airlines." The PMI plan is said to include measures for employment retention and the restructuring of overlapping businesses. If Hanjin KAL violates this obligation, it will have to pay a penalty of 500 billion won.
Meanwhile, as of December last year, the Korea Development Bank holds 10.58% equity in Hanjin KAL. Chairman Cho Won-tae and related parties hold an equity ratio of 19.95%.