Korean Air representatives sign contract for stake in Czech Airlines
10-Apr-2013 Today, a contract for the purchase of 460,725 Czech Airlines (CSA) shares - a 44% stake in CSA - by Korean Air was signed at the Government Office. Czech representatives at the signing included Petr Necas, Prime Minister of the CR, Miroslav Kalousek, Minister of Finance of the CR, Miroslav Dvorak, Chairman of the Board and CEO of Czech Aeroholding and Petr Vlasak, first Vice Chairman of the Board of Directors of Czech Aeroholding. The Korean air carrier was represented by Yang Ho Cho, the Chairman and CEO of Korean Air; Chang Hoon Chi, President of Korean Air; and Mr. Won Tae Cho Executive Vice President for Corporate Strategy & Planning Divison. Thus, the search for a Czech Airlines strategic partner has successfully come to a close.
In November 2012, the government of the Czech Republic decided to initiate the selection of a strategic partner for CSA. Subsequently, Czech Aeroholding as CSA majority shareholder invited the 52 largest international carriers to take part in the tender procedure. A single offer from Korean Air was submitted by the March 1 deadline for binding offers. On March 13, the Government of the CR approved the sale of a 44% stake in Czech Airlines.
The sale of a 44% stake in Czech Airlines to Korean Air will strengthen economic ties between the Czech Republic and the Korean Republic and other Asian countries. "The new stake bought by Korean Air in Czech Airlines will significantly impact the entire Czech Republic, thanks to tighter ties with the rapidly growing Asian region, increasing awareness from potential Korean and Asian investors, increasing commercial collaboration and reinforced tourism between the Czech Republic and Asian countries," Petr Necas, the Prime Minister of the Czech Republic, stated.
"We have known Czech Airlines for a number of years, during which we have both been part of the SkyTeam alliance. Our successful codeshare collaboration only confirms that our decision to become a strategic partner of the Czech national carrier, culminating in our signing of the contract, is the correct decision, " added Yang Ho Cho, Chairman of the Board of Directors and CEO of Korean Air. He then outlined future collaboration: "We consider Czech Airlines a trustworthy partner with whom we wish to expand into Central and Eastern Europe. We believe that Czech Airline have a lot of room for growth. As a SkyTeam partner, we think that both Korean Air and Czech Airlines can benefit through this cooperation."
Korean Air's stake in Czech Airlines will positively impact CSA's cost structure, due to the synergies available in purchasing services, technology and other items. The development of Czech Airlines is a key employment factor for the region, as well as for other companies in the Czech Aeroholding group, particularly Vaclav Havel Airport Prague, Czech Airlines Technics and Czech Airlines Handling.
"The entry of the Korean company represents a guarantee for the Czech Republic and its citizens that a significant Czech company with a ninety-year-old tradition will not disappear. However, this step also means that its future development and also employment in the region will be secured. Through the development of collaboration between Czech Airlines and Korean Air at Vaclav Havel Airport Prague, the significance and prospects of Vaclav Havel Airport Prague will grow," stated Miroslav Kalousek, Minister of Finance of the Czech Republic.
"I appreciate the fact that a company as significant as Korean Air has decided to support the development of Czech Airlines and Vaclav Havel Airport Prague. As part of that development, CSA is to provide for transfer passenger transport within Europe, coordinating the flight schedules between the two companies in such a way that better use is made of CSA's existing capacity," Miroslav Dvorak, Chairman of the Board and CEO of Czech Aeroholding, said looking at the future.
After signing the contracts, the stock and purchase price will be exchanged. Both steps should take place by the end of Q2 of this year. The entry of the strategic investor will be accompanied by notification to the European Commission.