Korean Air Lines Co., South Korea's biggest airline and national flag carrier, said Thursday it will sell property and non-core assets to improve its financial status.
Korean Air plans to sell its idle property in central Seoul and a non-core business unit to emerge as a financially healthy company amid growing uncertainties in the airline industry, the company said in a statement.
The company aims to sell its land and building in Songhyeon-dong and an entire 100 percent stake in Wangsan Leisure Development Co., a leisure company that operates the Wangsan Marina resort in Incheon, 40 kilometers west of Seoul, within this year, it said.
Korean Air purchased the Songhyeon-dong site from Samsung Life Insurance Co. in 2009 and planned to develop a cultural complex.
But the development project faced multiple development challenges such as building height restrictions and cultural asset preservation as the land is located near the presidential office of Cheong Wa Dae and Gyeongbok Palace, one of the country's most valuable cultural assets.
The company's board also agreed to establish a governance committee to improve the transparency of its governance structure.
The committee will review and make recommendations about the company's key management decisions, the statement said.
The move comes as the Hanjin Group family is divided over the airline-focused conglomerate's management control ahead of a shareholders meeting next month.
Cho Hyun-ah, 45, the heiress of Hanjin Group, widely known for the "nut rage" incident in 2014, has recently joined hands with local activist fund Korea Corporate Governance Improvement (KCGI) and midsized builder Bando Engineering & Construction Co. to invite a professional manager to improve the group's management, financial status and shareholder value.
Her 44-year-old brother Won-tae currently serves as chairman of Hanjin Group and Korean Air after he was appointed to the top post in April following his father's death. His reappointment as chairman is subject to shareholders' approval next month.
In response to Hyun-ah's alliance with the KCGI and Bando, her mother Lee Myung-hee and younger sister Hyun-min, 37, said in a statement they stand against Hyun-ah's approach.
"We support the current management structure headed by Chairman Cho Won-tae and hope the current management will make its best efforts to enhance financial health and shareholders' value," the statement said.
They also asked Hyun-ah to come back as a member of the Hanjin family and join forces to promote the group's stability and development.
Meanwhile, Hanjin KAL Corp., the holding company of Hanjin Group, is expected to take similar steps for its financial health.
At a meeting to be held on Friday, Hanjin KAL's board is likely to approve a plan to sell the Jeju KAL Hotel and the Paradise Hotel in Seogwipo in the southern part of Jeju Island, a person familiar with the matter told Yonhap News Agency.
KAL Hotel Network, an affiliate of Hanjin KAL, currently operates four hotels -- three in Jeju and one in Incheon -- which have posted losses since 2015. (Yonhap)