Korean Air Lines (KAL) is likely to complete the sale of its in-flight catering and duty-free business to private equity firm Hahn & Company soon, industry sources reported.

The carrier inked a deal in September to sell the unit to a new company established by Hahn & Co for 990 billion won ($845 million) and reinvest 100 billion won in the company.

KAL and Hahn & Co included a call option and tag-along right in their agreement in case of re-acquisition and exit. Two companies reportedly signed a long-term supply agreement.

Hahn & Co has financed the deal from acquisition financing arranged by NH Investment & Securities. KAL had given exclusive negotiation rights to firms with large-sized blind-pool funds.

KAL’s in-flight catering and duty-free businesses will be turned into a new entity called Korean Air C&D in mid-December. The in-flight catering business has recorded revenue of 100 billion won and the duty-free business 150 billion won in recent years. The entity is expected to generate at least 400 billion won of revenue when the Covid-19 pandemic ends.

The recovery of the aviation industry from the prolonged pandemic is likely to determine the success of the investment in KAL’s in-flight business unit, while Hanjin KAL’s planned takeover of Asiana Airlines could also have an impact on the deal. Hanjin KAL is the parent company of KAL. (Reporting by Ik-hwan Choi)