Korean Air will acquire aircraft maintenance parts and other items worth 26.585 billion won from its affiliate Air Busan.

Korean Air announced its decision on the asset acquisition in a regulatory filing on the 4th. The transaction is intended to transfer Air Busan's maintenance materials, following Korean Air's assumption of low-cost carrier (LCC) aircraft maintenance support contracts in the course of its merger with Asiana Airlines.

■ Transaction Overview The counterparty is Air Busan, an affiliate of the Hanjin business group, and the assets to be acquired are aircraft maintenance parts and other items. The scheduled acquisition date is December 17. The acquisition price of 26.585 billion won was determined based on a valuation conducted by an external appraisal agency.

Korean Air stated that the acquisition will increase its tangible assets and result in a cash outflow for the purchase price.

■ Board Approval and Possibility of Changes The transaction was approved at a board of directors meeting on November 4. Six outside directors attended the meeting with no absences, and audit committee members were also present.

However, the acquisition date and price may change depending on agreement with the counterparty. Korean Air explained that the terms of the transaction could change in the future depending on consultations, approvals, and other related procedures with relevant authorities.