HDC Hyundai Development Co.'s planned takeover of Asiana Airlines Inc. appears likely to collapse this week as the property developer failed to narrow differences with the airline's creditors over acquisition terms, people familiar with the matter said Tuesday. 

The deal, if it falls through, would become the country's second botched deal in the coronavirus-hit airline sector this year, following Jeju Air Co.'s cancellation of its plan to acquire smaller rival Eastar Jet Co. in July.

Kumho Industrial Co., which holds a controlling stake in Asiana Airlines, is expected to notify HDC of the termination of the deal by Friday when government officials are set to meet to discuss ways to support the financially troubled carrier.

On Friday, ministers handling the Asiana deal and officials in charge of the state fund set up for the airline and other backbone industries are scheduled to have separate meetings.

Asiana's creditors -- the Korea Development Bank (KDB) and the Export-Import Bank of Korea (Eximbank) -- are expected to report their plan B for the country's second-biggest airline to the ministers following the deal's rupture, industry people said.

They said the state fund is likely to inject 2 trillion won ($1.68 billion) into Asiana to help the cash-strapped carrier stay afloat this year.

The KDB and Eximbank have already extended a combined 3.3 trillion won, including 1.7 trillion won this year, in the past two years. 

KDB Chairman Lee Dong-gull and HDC Chairman Chung Mong-gyu met late last month, but they failed to produce any breakthrough for the stalled deal amid the COVID-19 pandemic.

Lee reportedly suggested a sharp reduction in the acquisition price by 1 trillion won ($840 million) in the last-ditch attempt to push the deal forward. 

But HDC once again demanded another round of due diligence on Asiana, which was already rejected by the creditors and Kumho Industrial.

Once the two sides announce the deal's collapse, Asiana is expected to be placed under the control of the creditors and undergo restructuring to find a new owner. 

In December, the HDC-led consortium signed the deal to acquire a 30.77 percent stake in Asiana from Kumho Industrial, a construction unit of Kumho Asiana Group, as well as new Asiana shares to be issued and the carrier's six affiliates, for 2.5 trillion won.

But the pandemic has emerged as a major stumbling block to the deal.

Asiana has suspended most of its flights on international routes since March.

It has had all of its 10,500 employees take unpaid leave for 15 days a month since April until business circumstances normalize.

Asiana's executives have also agreed to forgo 60 percent of their wages, though no specific time frame was given for how long the pay cuts will remain in effect.

As a result, Asiana's net losses deepened to 432.88 billion won in the January-June period from 267.4 billion won a year earlier. (Yonhap)