Korean Air said Wednesday (13 May) that it plans to issue new shares to secure 2.2 trillion won (US$1.79 billion) worth of funds to overcome the liquidity crisis caused by COVID-19. At a board meeting Wednesday the airline said it plans to issue new shares to raise 1 trillion won as well as receive government aid.
The airline will increase paid-in capital by first allocating newly issued shares to shareholders and then opening up remaining shares to the public. A total of 79,365,079 million shares of its stock are planned to be issued at KRW 12,600 each. The total number of Korean Air’s issued shares will increase from 95,955,428 to about 175 million shares. The final issue price will be confirmed on 6 July 2020 and the listing of new shares will take place on 29 July.
Korean Air’s board of directors decided to receive 1.2 trillion won of government aid in the form of 700 billion won of asset-backed securities based on cargo sale bonds and 300 billion won worth of perpetual bonds with stock conversion rights through the Korea Development Bank and the Export-Import Bank of Korea. The board also decided to receive an asset-backed loan of 200 billion won.
“Korean Air will continue to carry out self-rescue measures to overcome the dismal business environment due to COVID-19,” the airline said. “As part of the airline’s efforts, its executives have forgone up to 50 percent of their salaries and 70 percent of the airline’s employees have gone on leave. Also, in an effort to further increase liquidity, Korean Air is in the process of selling non-core assets such as land in the city centre of Seoul and shares in Wangsan Leisure Development.”
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