Jeju Air plans to raise more funds in bond issuance Budget airline seeks to secure more funds to improve financial soundness and stabilize business
Translated by Kim So-in 공개 2022-05-17 08:02:13
이 기사는 2022년 05월 17일 08:01 thebell 에 표출된 기사입니다.
South Korea’s low-cost carrier Jeju Air is seeking to raise up to 150 billion won ($117 million), six months after it received state financial support at the end of last year.Jeju Air recently said in its regulatory filing that it will issue a hybrid bond worth up to 150 billion won. It is a perpetual bond with a maturity of 30 years and bondholders are allowed to extend the maturity as much as they want. The company already raised 63 billion won and is planning to raise up to 87 billion won on May 26.
The yield is quite high at 7.4% per annum, with additional 5% added after one year. After that, the yield will go up by 1% each year. Jeju Air sold its perpetual fund to Korea Development Bank in 2020 and 2021 at a yield of around 5%.
The bond includes a call option allowing the issuer to pay back one year after issuance. This will help the carrier reduce its financial expenses. The loss-making company spent 22.5 billion won as financial expenses last year.
Jeju Air is not in urgent need of funds it already raised hundreds of billions of won at the end of last year as it aimed to secure its working capital in advance amid uncertain business conditions.
The carrier raised 206.6 billion won in a rights offering in November 2021 and secured 150 billion won from the country’s key industry stabilization fund. This boosted the company’s cash reserves to 284.9 billion won, up 120 billion won from the end of 2020.
The latest decision to raise additional funds is aimed at bolstering its financial soundness. Jeju Air’s financial statement has significantly weakened as it has suffered losses of nearly 300 billion won each year over the past two years. Its debt-to-equity ratio skyrocketed to 586% at the end of last year as its debt increased by 140 billion won in just one year.
The company also plans to stabilize it business. Although international travel is recovering recently, concerns in the airline industry remain due to external factors including oil prices, foreign exchange and ongoing pandemic.
Some market watchers said the company is seeking to secure new growth engine. Jeju Air has recently joined a consortium of six companies to provide urban air mobility (UAM) services in efforts to find a new growth driver.
Jeju Air will also adopt a cargo plane next month for the first time among local low-cost carriers. (Reporting by Su-jin Yoo)
< 저작권자 ⓒ 자본시장 미디어 'thebell', 무단 전재, 재배포 및 AI학습 이용 금지 >
관련기사
best clicks
최신뉴스 in 전체기사
-
- 우리금융 "롯데손보 M&A, 과도한 가격 부담 안한다"
- 신한캐피탈, 지속성장 포트폴리오 리밸런싱 체계 강화
- 하나금융, ELS 악재에도 실적 선방…확고한 수익 기반
- 하나금융, 자본비율 하락에도 주주환원 강화 의지
- 국민연금, '역대 최대 1.5조' 출자사업 닻 올렸다
- [도전 직면한 하이브 멀티레이블]하이브, 강한 자율성 보장 '양날의 검' 됐나
- [퍼포먼스&스톡]꺾여버린 기세에…포스코홀딩스, '자사주 소각' 카드 재소환
- [퍼포먼스&스톡]LG엔솔 예견된 실적·주가 하락, 비용 절감 '집중'
- [퍼포먼스&스톡]포스코인터, 컨센서스 웃돌았지만 주가는 '주춤'
- 신한금융, ‘리딩금융’ 재탈환에 주주환원 강화 자신감