HDC Hyundai Development Co.’s acquisition of Asiana Airlines Inc. may be headed for the long haul as it remains unclear when the clouds will clear up for the air travel industry.

The merger review process is likely to end by the end of this month, according to industry sources on Monday. Russia has yet to give its sign-off due to coronavirus setbacks. Five other countries including China and the U.S. have already green-lighted the deal.

The merger control filings would have to be completed in all six countries before HDC can close the $2 billion deal struck last December. The construction company had said it would buy 320 billion won ($259 million) of Asiana Airlines shares and take up 2.2 trillion won worth of new issues to shore up the debt-laden carrier.

But some say HDC may stall the acquisition even if it gains all the necessary approvals, given the dismal finances of Asiana Airlines.

According to its first-quarter statements, Korea’s No. 2 full-service carrier reported an operating loss of 208.2 billion won, widened from the 11.8 billion won loss a year earlier. Sales dipped 21.5 percent to 1.13 trillion won. Net losses surged to 549 billion won.

State-run Korea Development Bank (KDB) and Export-Import Bank of Korea (Eximbank) previously announced plans to provide 1.7 trillion won to Asiana Airlines, bigger than the 1.2 trillion won package for the No. 1 Korean Air Lines Co. They also urged HDC to finalize the merger as soon as possible.

There have been talks of sweetening the deal by issuing new Asiana Airlines shares at a reduced price to raise HDC’s stake at a cheaper cost.

Creditors are bracing for the worst. Even if the deal falls through, they would not have to package extra money as the carrier would be under de-facto state management after a new government lifeline. Airlines and shippers are among the first to benefit from the 40-trillion-won public fund to protect key industries.

By Kim Gang-rae and Kim Hyo-jin

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