South Korea’s SK Group is said to be considering buying about 10 percent of AirAsia Group, a Malaysian low-cost carrier strapped in liquidity woes due to COVID-19.
Local media in Malaysian reported on Thursday that an investment entity set up by SK Group companies with a focus on Southeast Asia has been approached with the offer for a 10 percent stake for 100 billion won ($82 million) in total or 1 Malaysian ringgit ($0.23) per piece in AirAsia, the largest budget carrier in Asia. The budget airline reportedly has been tapping various investors for cash to solve its immediate liquidity issues caused by the coronavirus crisis.
SK Group confirmed on Thursday that it has received the offer from AirAsia. It is weighing the option purely for investment purposes but is yet to make a decision, the company said.
[Photo provided by AirAsia Group]
Market experts suspect the Korean conglomerate is mulling the investment in AirAsia for opportunities in the group’s digital transformation business in the field of aviation services, not for its direct entry into the airline industry.
SK Group is the third largest conglomerate in Korea based on assets in 2019. Its business spans from telecommunication service to memory chip and energy.
The conglomerate has been active in expanding its presence in Southeast Asia. Through the investment entity jointly set up in 2018 by five SK groups – SK Holdings, SK Innovation, SK Telecom, SK E&C, and SK Hynix – to explore business opportunities in Southeast Asia, it acquired a 9.5 percent stake in Vietnam’s second-biggest conglomerate Masan Group for $470 million in 2018 and a 6.1 percent stake in Vietnam’s largest enterprise Vingroup for $1 billion last year.
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