A Seoul court on Tuesday allowed Korean Air Lines’ parent company to go ahead with a stock issuance, clearing the way for the flag carrier’s planned acquisition of indebted Asiana Airlines.
The Seoul central district court declined a request to bar the airline’s parent, Hanjin Kal, from issuing new shares to state-run Korea Development Bank (KDB), a court spokesman said.
The move, which would dilute the stakes of existing shareholders, is a step in Korean Air’s plans to become Asiana’s top shareholder, at a cost of 1.8 trillion won ($1.62 billion).
Activist fund KCGI, the largest shareholder of Hanjin Kal, had sought the court injunction.
Shares in Asiana Airlines and Korean Air Lines rose on Tuesday after the ruling, which was welcomed by the carrier and KDB in separate statements, although KCGI did not offer immediate comment.
“Korean Air will do its best to overcome the crisis, strengthen competitiveness and ensure the job security of employees,” the national carrier said.
Source: Reuters.com