A promotional photo of a T'way Air's aircraft. (T'way Air)
South Korea’s private equity firm JKL Partners is poised to inject 80 billion won ($70.7 million) in Korean low-cost air carrier T‘way Air in April, a filing showed on March 17.
JKL Partners was offered the opportunity to buy some 31.8 million convertible preferred shares in T’way’s capital increase, so that T’way Air can use its proceeds to pay the cost of airplane lease and maintenance. The securities offering plan to the third-party investor gained board approval on March 16.
Each preferred share is convertible to one common stock of T‘way, currently priced at 2,512 won apiece. The deal term prevents JKL from withdrawing its investment for at least a year.
The deal awaits approval at the T’way shareholders meeting scheduled for March 31.
The news comes a few months after T‘way managed to raise 66.8 billion won from shareholders in November. T’way is indirectly controlled by book publisher YeaRimDang Publishing.
T‘way is among the nation’s cash-strapped low-cost carriers opting to increase capital through securities offerings instead of debt financing, as COVID-19 travel restrictions are dealing a blow to the aviation sector. T‘way recorded an operating loss of 174.3 billion won in 2020, up 805.9 percent on-year.
JKL Partners, founded in 2001, has been dedicated to private equity investing strategies such as buyouts and growth capital. Its portfolio ranges from Lotte Non-Life Insurance to game publisher Krafton and cloud services provider Megazone Cloud.
JKL became another of the local firms betting on a post-pandemic recovery in the aviation industry. Earlier this month, private equity firm JC Partners proposed to buy a controlling stake in fledgling hybrid air carrier Air Premia.
By Son Ji-hyoung (email@example.com)