Korean Air Outlines Plan to Secure KRW 2.2 Trillion to Overcome COVID19

Korean Air is looking to secure KRW 2.2 trillion (approximately US$1.8 billion) worth of funds to overcome the liquidity crisis caused by the ongoing COVID19 pandemic.

At its board meeting on 13 May, Korean Air confirmed plans to issue new shares to raise KRW 1 trillion as well as methods to 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 will receive KRW 1.2 trillion of government aid in the form of KRW 700 billion of asset-backed securities based on cargo sale bonds and KRW 300 billion worth of perpetual bonds with stock conversion rights through the Korea Development Bank and The Export-Import Bank of Korea.

The board has also decided to receive an asset-backed loan of KRW 200 billion.

Korean Air says it will continue to carry out self-rescue measures to overcome the dismal business environment due to COVID19. 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 center of Seoul and shares in Wangsan Leisure Development Co., Ltd.

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