MBK Partners’ Special Situations Fund is expected to participate in an acquisition bid for Asiana Airlines’ cargo business by teaming up with a domestic low-cost carrier (LLC), according to company officials and industry watchers, Sunday.The Special Situations Fund II is the Asia-focused private equity firm’s second flagship fund with a size of 2.1 trillion won ($1.8 billion) established in 2021. Yet, it is largely undecided which domestic carriers will be partnering with the private equity fund for the acquisition bid.”It’s a deal that’s out in the market, and the Special Situations Fund is reviewing whether to join the acquisition deal. But nothing has been decided for now,” an official from MBK Partners told The Korea Times on Sunday.
Early last month, UBS, the lead advisor for the sale, announced the shortlist of four LCCs — Jeju Air, Air Premia, Eastar Jet and Air Incheon — as potential buyers of the airline’s cargo business.Given that only businesses with Air Operator Certificate (AOC) accreditation are eligible to participate in the bidding process, MBK Partners is required to join hands with one of the shortlisted carriers, if the private equity fund aims to enter the bid.Considering the limited financing capabilities of the shortlisted candidates, some of the low-cost carriers are mulling over the possibility of partnering with multiple financial investors with ample cash to strengthen their funding power to win the bidding.
The seller — Korean Air — plans to select a preferred bidder as early as next month, as the first round of bidding is slated to be held at the end of this month.While the sales price of the cargo business is estimated to be around 500 to 700 billion won, potential buyers, who are currently conducting due diligence over the deal, are reportedly aiming at a lower price.Asiana Airlines’ freight business currently operates a total of 11 cargo aircraft, including eight owned cargo planes and three leased ones, posting an annual revenue of 1.61 trillion won last year.In February this year, the European Commission approved Korean Air’s acquisition of Asiana Airlines under the condition of full compliance with the remedies offered by Korean Air last November. Korean Air submitted the remedy proposal to the European regulatory 스포츠토토존 authority in November, including the sale of Asiana Airlines’ cargo business.