HDC Hyundai Development Co. said Friday it will raise 400 billion won ($344 million) in a rights issue to help finance its acquisition of Asiana Airlines Inc.

HDC plans to issue 21,969,110 shares, or half of its outstanding 43,938,220 shares, at about 18,550 won per share, the company said in a statement.

The price will be finalized on March 2, and investors are required to make their payments for the purchase of the new shares by March 13. The new HDC shares are set to be listed on the main KOSPI market on March 26, it said. 



HDC said it will join the recapitalization to have the acquisition process go as planned.

The company will raise about 2 trillion won by issuing new shares and corporate bonds and through other means to acquire the country's second-biggest airline and its six affiliates, which include low-cost carriers Air Busan and Air Seoul Inc., the statement said.

It currently holds cash reserves worth 730 billion won.

Last month, the consortium formed between HDC and Mirae Asset Daewoo signed a deal with Kumho Industrial Co., a construction unit of Kumho Asiana Group, to take over a 30.77 percent stake in Asiana Airlines held by the construction company for 2.5 trillion won.

HDC plans to complete the overall acquisition process by April.

It is expected to own a 61.5 percent stake in Asiana Airlines after the planned rights issue, with Mirae Asset Daewoo set to have a 15 percent stake in the carrier.

The company said it will initially focus on improving profitability by streamlining Asiana's routes and enhancing cost effectiveness. 

In 2018, Asiana Airlines and its main creditor Korea Development Bank signed a deal that required the airline to secure liquidity through sales of assets and other means.

Asiana Airlines currently owes financial institutions a total of 3 trillion won.

From January to September, Asiana shifted to a net loss of 524.14 billion won from a net profit of 6.33 billion won a year ago due to lower demand to Japan and lower cargo-carrying volumes.