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Korean Air and Asiana (Yonhap) |
Korean Air Lines Co., South Korea's biggest carrier, said Thursday it has raised 3.3 trillion won ($3 billion) in a share sale for its planned acquisition of smaller rival Asiana Airlines Inc.
Korean Air issued 173.6 million shares at 19,100 won per share, which is lower than the closing price of 27,400 won Wednesday, the company said in a regulatory filing.
The national flag carrier plans to list the shares on the Korea Exchange on March 24, it said.
Out of the rights issue proceeds, the national flag carrier said it will spend 1.5 trillion won to buy Asiana and use the remaining 1.8 trillion won to pay back its debts.
Shares in Korean Air fell 0.2 percent this year through Wednesday to 27,150 won, far underperforming the broader KOSPI's 2.9 percent gain.
Korean Air has recently finished due diligence on Asiana as it is scheduled to come up with a post-merger integration plan to Asiana's main creditor, the Korea Development Bank (KDB), by next Wednesday.
To proceed with the deal, Korean Air submitted documents by Jan. 14 to antitrust authorities in the countries to which the carrier flies for review of the merger.
The eight countries are South Korea, the United States, China, Japan, Turkey, Vietnam, Taiwan and Thailand.
Earlier last month, Korean Air received the first approval from Turkey over the merger of the country's two biggest airlines.
Korean Air expects no major problems in obtaining approval from overseas for the merger given that bigger merger deals went smoothly in the past.
Korean Air and Asiana account for a combined 40 percent of passenger and cargo slots at Incheon International Airport, South Korea's main gateway. It does not constitute a monopoly, the company said.
The two airlines have suspended most of their flights on international routes since March 2020 as countries strengthen their entry restrictions to stem the spread of the pandemic.
Korean Air's net losses narrowed to 291.45 billion won in 2020 from 622.76 billion won a year earlier as it focused on winning more cargo delivery deals to offset the pandemic-caused slump in travel demand.
Asiana's net losses also narrowed to 404.51 billion won from 817.89 billion won during the same period. (Yonhap)
