Korean Air bequest as planned… National pension opposition exceeded

Korean Air decided to increase the total number of issued shares through an extraordinary general shareholders’ meeting. It is now possible to proceed with the takeover of Asiana Airlines by defeating opposition from the national pension, the second largest shareholder. With the passage of the agenda, Korean Air’s paid-in capital increase planned in March is expected to proceed without a hitch.

Korean Air held an extraordinary general shareholders’ meeting on the 6th and decided to increase the total number of issued stocks. Korean Air has changed its current charter of 225 million shares to 700 million shares.

On this day, 9772,2790 shares, 55.73% of the 175,322,466 shares with voting rights, were present at the shareholders’ meeting. The approval rate was 69.98%. Amendment of the articles of incorporation is a special resolution and must be agreed by at least two-thirds of the shareholders attending the general shareholders’ meeting.

With the passage of the agenda, Korean Air has made it possible to issue a paid-in capital increase to shareholders worth 2.5 trillion won in March. The secured funds will be used to acquire Asiana. Korean Air is procuring the rest of the market, excluding about 700 billion won for Hanjin Kal, a holding company of Hanjin Group.

The National Pension, the second largest shareholder with 8.11% ownership, expressed opposition to the amendment to the articles of association. This is due to concerns that the acquisition of Asiana could damage the value of existing shareholders. The National Pension Service confronted the Industrial Bank of Korea, which is promoting the merger of the two companies, pointing out that due diligence before the contract was insufficient.

Korean Air plans to take over Asiana by mid-March. Korean Air is currently operating a takeover committee for each sector such as planning, finance, passengers, and cargo. During this month, a business combination report is submitted to domestic and international competition authorities.