Asiana Airlines said on Tuesday it would reconvene a board meeting in early November to decide whether it should accept a merger proposal from Korean Air that includes the sale of its cargo operations to remedy EU antitrust concerns.
Asiana’s board did not reach a decision in a meeting on Monday whether to accept Korean Air Lines’ offer.
Asiana creditors, including state-run lender Korea Development Bank, have been looking for a new owner of the debt-laden carrier for several years. Local rival Korean Air agreed to acquire Asiana in 2020 during the COVID-19 pandemic.
Korean Air’s acquisition plan still needs approval from the European Union, the United States and Japan.
“The board meeting that is now in recess will resume in early November and make a final decision,” Asiana said in a statement.
Korean Air, South Korea’s biggest carrier, planned to submit a corrective action plan to the European Commission by the end of October to gain EU approval, but that timeline is no longer possible pending a decision by Asiana’s board.
“We are unable to submit the remedies by the end of October. Korean Air will decide on the new remedy submission date according to the decision of Asiana Airlines’ board of directors,” Korean Air said in a statement to Reuters.
Asiana’s share price rose as much as 14.2% in Tuesday mid-day trade, recovering earlier losses, whereas Korean Air Lines was up 2.5%. The benchmark price index was down 1.3%.
Choi Gowoon, an analyst at Korea Investment & Securities, said investors in Asiana appeared to have more certainty about the fate of the merger deal, as shown by the rise in the price of the shares which had fluctuated in recent days.
Reuters