South Korea’s cash-strapped flag carrier Korean Air Lines said Tuesday it plans to sell its inflight meal catering and duty-free units to local private equity firm Hahn & Co.

“As for the divestment of inflight catering services and duty-free operations, Korean Air has given Hahn & Co. the exclusive rights to negotiate,” it said in a disclosure after a board meeting at 4 p.m.

“Korean Air will continue to discuss the details about the transaction with Hahn & Co. and will disclose immediately when the deal terms materialize.”

This comes amid the carrier’s search for short-term liquidity mainly to refinance debt via borrowings and perpetual bonds, as the coronavirus pandemic has taken a toll on the travel industry across the globe.

The amount of borrowing that is due to mature by the end of this year is estimated at some 3.3 trillion won ($2.76 billion) as of end-March, while the air carrier may exercise the early repayment for 701.1 billion won of perpetual bonds this year.

Korean Air has strived to mitigate the liquidity woes through state-backed loans contingency funds, divestment and increases in capital via newly issued shares.

On Tuesday, Korean Air announced plans to raise 1.13 trillion won via common shares priced at 14,200 won each. Its parent Hanjin KAL backed 320.5 billion won in the capital increase. The new shares will start trading on the main bourse Kospi on April 29.

Korean Air’s share price was 17.200 won on Tuesday closing, down 3.1 percent from the previous day.

This comes after the nation’s No. 1 air carrier had obtained funds amid the government’s bailout efforts to keep essential businesses afloat as the spread of the novel coronavirus does not seem to be coming to an end in the near future.

In April, Korean Air took out some 1.2 trillion won in loans from state-run financial institutions -- Korea Development Bank and the Export-Import Bank of Korea. The nation’s contingency fund also green lighted plans to back 1 trillion won to Korean Air.

In addition to the inflight businesses, Korean Air has put up for sale tangible assets such as Wangsan Marina, a yachting resort near Incheon Airport, and an empty lot near the Gyeongbokgung Palace in central Seoul.

Hahn & Co. is the nation’s second-largest private equity house, overseeing some 8.1 trillion won in assets. All its funds are Korea-focused.

By Son Ji-hyoung (consnow@heraldcorp.com)