South Korea’s Hanwha Group is preparing to bid for Fly Gangwon under court’s protection. Hanwha is in the final stages of reviewing its bid, a deal estimated at 20 billion-30 billion won, reports Korea Economic Daily. Fly Gangwon was put up for sale after it filed for court receivership in May 2022.
The airline might need a cash influx of additional 50 billion won including various costs such as aircraft leases, maintenance etc to normalize its business.
The Seoul Bankruptcy Court will receive bids this month, under which it will sign a tentative agreement with a preferred buyer. Post this bank will look out for other bidders with better terms.
Samil PwC is managing the sale.
Two to three private equity firms have handed in letters of intent, but Hanwha is touted as the strongest candidate in terms of financial capability. Besides this is the best path for South Korean conglomerate to enter the aviation industry.
“The buyout of Flying Gangwon will be just the beginning. Hanwha Group is keeping an eye on Asiana Airlines as an acquisition target,” an investment banking source told Market Insight, the capital market news outlet of The Korea Economic Daily.
In 2019, when Asiana’s owner Kumho Group put the airline up for sale, Hanwha was viewed as a strong candidate. Although it did not bid for the carrier Hanwha Group formed a task force to study the financial and legal aspects of the bid, the sources claim.
Fly Gangwon was founded in 2016.