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[Alpha Biz=(Chicago) Reporter Kim Jisun] The success of Asiana Airlines' sale of its cargo division has been unexpectedly sluggish, and it is expected that it will be virtually uncertain whether it will complete the race.
According to the investment banking (IB) industry on the 24th, Asiana Airlines' cargo division received a letter of intent to take over from airlines after the sale was decided through the board of directors.
So far, three companies have submitted letters of intent for preliminary acquisition: Eastar Jet, Air Incheon and Air Premia. As Jeju Air and T'way Airlines, which were initially considered strong candidates for the acquisition, did not participate in the preliminary bidding, all of the top domestic low-cost carriers (LCC) did not participate.
From the perspective of LCC, Asiana Airlines' acquisition of the cargo business can grow in size and secure stable cash cow at once. Asiana Airlines' annual cargo sales ranged from 1.3 trillion won to 1.4 trillion won between 2017 and 2019, but rose to 2.1 trillion won to 3.1 trillion won as it boomed during the new coronavirus infection (COVID-19).
The problem is the 'acquisition price'. The market estimates that the sale price of Asiana Airlines' cargo division is between 500 billion won and 700 billion won. In addition, the cargo division's debt is estimated at about 1 trillion won, so it will have to cover a large sum of 2 trillion won for the acquisition. LCCs are continuing their best performance this year due to a recovery in air demand, but they are busy reducing their debts accumulated during the COVID-19 period.
According to cash and cashable assets held by LCCs as of the third quarter of this year, Jeju Air has KRW 303.1 billion, T'way Airlines has KRW 170.8 billion and Jin Air has KRW 467.9 billion.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
