Korean Air plans $3.3 bn asset sale to cut debt
Seoul (AFP) - Korean Air said Thursday it would sell off assets valued at 3.5 trillion won ($3.3 billion) to reduce its burgeoning debt pile and improve its financial structure.
South Korea's biggest airline vowed to halve its 800 percent debt to assets ratio by 2015, after it suffered snowballing debts stemming mainly from the purchase of new planes.
Korean Air said it would sell shares worth 2.2 trillion won in S-Oil Corp, a joint venture controlled by Saudi Arabia's Aramco.
It will also gain 1.3 trillion won by selling real estate, assets and 13 old planes in the next two years.
However the company said it would go ahead with the planned purchase of about 10 new planes every year.
Korean Air posted a third quarter net profit of 342 billion won, down 1.0 percent from a year ago on a decline in passenger traffic.
It said it would provide additional support for its troubled sister firm Hanjin Shipping.
In October Korean Air injected 150 billion won into the shipping line. Hanjin Shipping also promised to liquidate non-core businesses and sell unused assets.
