Korean Air to Sell Land and Assets

Korean Air has unveiled a number of actions it is taking designed to improve its financial position and increase corporate transparency.

As part of the plans, Korean Air is selling its land and building in the center of Seoul, Songhyeon-dong, and its stakes in Wangsan Leisure Development Co. Ltd., a leisure company that operates the Wangsan Marina resort in Incheon.

Korean Air purchased the Songhyeon-dong site from Samsung Life Insurance in 2009 and planned to develop a cultural complex. However, the land is located near Gyeongbok Palace, one of the most valuable cultural assets in Korea, and Korean Air faced multiple development challenges such as building height restrictions and cultural asset preservation.

Meanwhile, Wangsan Leisure Development Co. Ltd. is a leisure company operating the Wangsan Marina resort in Incheon that was completed in 2016. It’s 100% owned by Korean Air. However, the airline says that an additional large and long-term investment would be required to create profitability.

Korean Air has also passed a resolution to strengthen the independence of its board of directors and improve governance transparency.

The Outside Director Recommendation Committee will be comprised of only outside directors to ensure the committee’s independence. To this end, internal director Kee-Hong Woo resigned his post and Dong-Jae Kim, an outside director, has been appointed as a new committee member.

In addition, Korean Air’s board of directors passed a resolution establishing a committee to improve the transparency of its governance structure. The governance committee will review and make recommendations about the airline’s major business issues that may have a significant impact on shareholder values and rights.

In November 2019, Korean Air took actions to improve governance transparency, such as establishing a corporate governance charter and appointing an independent outside director as chairman of the Outside Director Recommendation Committee. The governance committee has also been comprised of only outside directors, and Dong-Jae Kim has been appointed as chairman of the committee.

“Korean Air is determined to maximize shareholder value. The resolutions that were passed reflect the company’s strong will to improve its financial position and create a sound and transparent governance structure,” said a Korean Air representative. “We are fully committed to meeting these goals.”

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