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Korean Air to sell off S-Oil shares, old planes for cash

Korean Air to sell off S-Oil shares, old planes for cash

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Published : 2013-12-19 19:46
Updated : 2013-12-19 19:46

Korean Air announced on Thursday that it would secure fresh liquidity worth 3.5 trillion won ($3.3 billion) by selling off its shares of refiner S-Oil, plus 13 old, fuel-guzzling aircrafts and other properties.

The move is part of the airline’s efforts to improve its financial structure, the company said. The flagship unit of Hanjin Group used to maintain its debt-to-equity ratio at about 400 percent but the figure recently surged to 800 percent.
Among other things, the nation’s largest air carrier is believed to have poured considerable resources into adopting new aircrafts. Last year, the company announced it would purchase 12 new planes, including the B747-8i, B777-300EF and B787, by 2018.

Korean Air said it was talking with Saudi Aramco, the oil refiner’s largest shareholder, about selling off the 30 million S-Oil shares owned by its affiliate Hanjin Energy to raise 2.2 trillion won.

The company also decided to sell old planes such as the B747-400 and B777-200 and other properties to secure 250 billion won and 1.04 trillion won, respectively.

Meanwhile, the company also announced a new funding plan worth 100 billion won for its ailing sister company Hanjin Shipbuilding, following its previous financial injection worth 150 billion won in October.

It also said it would give support for the company’s turnaround efforts through a capital increase worth up to 400 billion won in the first half of next year.

By Lee Ji-yoon (jylee@heraldcorp.com)

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