South Korea’s second largest full-service carrier Asiana Airlines Inc. on Wednesday said it will dispose its entire holding in Daewoo Engineering & Construction Co. (Daewoo E&C), which is estimated at 55.8 billion won ($50.1 million), to improve its financial health.

Asiana Airlines said in a regulatory filing that it will sell off 9,138,514 shares of Daewoo E&C in a block trade before the market opens on Friday. It will sell the shares at 6,500 won apiece, the closing price of Nov. 7, with a discount rate. The proceeds from the sale are estimated at 55.8 billion won, which is worth 5.44 percent of its total equity capital.

Daewoo E&C stocks on Wednesday closed 1.54 percent down at 6,400 won from the previous session.

Asiana Airlines has decided to dispose its entire stakes in Daewoo E&C as part of its plan to sell non-core assets to improve the company’s financial soundness, according to the carrier. After the sale, the carrier will hold zero stakes in the builder.

According to the investment bank industry, Asiana Airlines has been finding it difficult to raise funds due to its high debt ratio that reached 851 percent as of the end of the first half ended June this year.

Separately, Kumho Tire Co. also sold off its 4.4 percent stake, or 18,277,029 shares, in Daewoo E&C in a block deal before the market opened on Tuesday.

Kumho Asiana Group, the parent company of Asiana Airlines, took over Daewoo E&C in January 2006 but three years later it resold its stakes due to liquidity crunch. In 2010, the state-run Korea Development Bank purchased the controlling stake in Daewoo E&C to rescue debt-ridden Kumho Asiana and put its two subsidiaries - Kumho Tire and Kumho Industrial - under a debt restructuring program. Kumho Asiana’s subsidiaries suffered from cash shortage following the group’s takeover of the builder in 2006.

By Cho Hee-young and Lee Ha-yeon

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