이 기사는 2021년 10월 15일 08:11 thebell 에 표출된 기사입니다.

Korean Air Lines has gotten into trouble with its acquisition of Asiana Airlines as it turns out that South Korea’s second largest airline had signed a contract in which it agreed to guarantee a minimum profit to Swiss in-flight meal company Gate Gourmet for 30 years.

Details of the contract were revealed during Tuesday’s trial against Park Sam-koo, former chairman of Kumho Asiana Group.

South Korean prosecutors accused Park of selling the exclusive in-flight catering service rights of Asiana Airlines to Gate Gourmet at a much discounted price of 133.3 billion won ($112 million) in exchange for the Swiss company’s purchase of a 160 billion won bond with warrant issued by Kumho Buslines.

Park promised Gate Gourmet minimum annual profits for 30 years or until 2047, according to the terms of an in-flight catering service contract between the two companies. This is highly unfavorable to Asiana Airlines. Prosecutors estimate the 30-year exclusive rights deal is worth at least 260 billion won and the deal’s value would increase to more than 500 billion won when taking the guarantee of minimum profits into account.

In June 2019, Gate Gourmet filed an arbitration claim with the International Chamber of Commerce in Singapore against Asiana Airlines to request payments of the guaranteed profits. The ICC earlier this year ruled that the airline should pay a total of 42.4 billion won, which includes delayed payments and legal expenses, to Gate Gourmet.

Asiana’s acquisition by Korean Air, the biggest ever deal in the country’s aviation sector history, is pending regulatory clearance. Korean Air plans to merge with Asiana a few years after the deal closes. It sold its in-flight catering business late last year to private equity firm Hahn & Company. Korean Air C&D, the new name of the business, has since continued to provide in-flight meals to Korean Air.

If the current contract with Gate Gourmet is transferred to the acquirer, the combined airline may have to continue to fulfill the agreement until 2047. Industry watchers think that renegotiating the terms is unlikely unless the Swiss company wants to do so.

With the acquisition still pending regulatory approvals, there is nothing Korean Air can do for now. There is little room for an adjustment in the acquisition price to reflect potential losses from Asiana’s contract with Gate Gourmet, especially considering that the deal was structured in a way that Korean Air takes a controlling stake in Asiana Airlines by purchasing new shares issued by the carrier, not those held by existing shareholders.

Korean Air also knew about the legal issue involving Gate Gourmet even before it agreed to buy Asiana. Moreover, the airline deal involves the state-controlled Korea Development Bank, which helped fund a large portion of the acquisition cost.

An official at Asiana Airlines said, “The trial (against former chairman Park Sam-koo) is still ongoing and thus it is not proper to comment on the matter.”

Korean Air intends to focus on obtaining regulatory approvals for the acquisition. “We will closely watch how things are developing,” an official at Korean Air said. “We hope Asiana Airlines and Gate Gourmet can resolve the conflict.” (Reporting by Su-jin Yoo)