Regarding the sale of the site in Songhyeon-dong, a key self-rescue measure, Korean Air submitted an application for grievance to the Anti-Corruption and Civil Rights Commission (ACRC) on June 11, saying, "Korean Air is suffering serious damage due to the Seoul Metropolitan Government's unilateral push to designate the site as a cultural park and express intention to expropriate it."
"Korean Air is currently making all-out efforts to overcome the COVID-19 crisis, including the sale of idle assets such as Songhyeon-dong site and a capital increase, for early normalization of its management, in response to support from the government and state-run banks," Korean Air said in a statement on June 12.
"Related to this, Korean Air submitted an application for grievance to the ACRC to inform the Seoul City's unfair administrative procedures and seek recommendation for correction."
"We plan to conduct a second round of the bidding for the Songhyeon-dong site as originally planned, but it is true that it is not easy given the current situation," Korean Air said. "We have no choice but to file a civil complaint with the ACRC with a desperate heart."
Korean Air said in the civil petition, "Companies that expressed their hope to participate in the bidding recently turned to reserved positions as the Seoul Metropolitan Government announced its intention to designate and forcibly purchase Songhyeon-dong's cultural park. In the end, all companies were absent on June 10, the deadline for the first preliminary bidding, causing a significant negative impact on Korean Air trying to secure urgent liquidity."
Earlier, the Seoul City announced a plan to change the Bukchon district unit plan, which calls for a plan to turn the Songhyeon-dong site into a park. It set aside 467.1 billion won ($386 million) for compensation for the site. The city is said to have set an internal policy to pay the compensation fee between 2021 and 2022. A setback is inevitable in Korean Air's self-rescue plan to increase capital by selling land in Songhyeon-dong for at least 500 billion won this year.
Since then, Korean Air has reportedly been internally struggling to come up with countermeasures as no one has submitted a letter of intent (LOI) to bid for the site in Songhyeon-dong, which ended on June 10.
There were 15 companies that had received investment manuals or indicated their intention to acquire them, but no one had made a preliminary bid for the sale. As Seoul City is speeding up its preliminary work to turn the site into a public park, the industry predicts that no one will participate in the main bidding.
Korean Air's labor union has protested Seoul City's push to turn the site into a park in Songhyeon-dong, calling it "irresponsible desk administration." The labor union held a press conference in front of the Seoul City Hall on the previous day and criticized the mayor and the Seoul Metropolitan Government for purchasing land of a private company at a bargain price, saying, "We are living in a state of job insecurity after hearing reports that the in-flight meal business division should be sold if the sale of the land in Songhyeon-dong fails."
