T'way Air Suspends Capital Increase Due to Low Subscription Rate from Major Shareholders

[Image source=Yonhap News]

[Asia Economy Reporter Eunmo Koo] T'way Air, facing a liquidity crisis due to the impact of the novel coronavirus infection (COVID-19), has decided to halt its planned rights offering aimed at raising operating funds.

T'way Air announced on the 29th through a public disclosure that it will suspend the 50 billion KRW rights offering, which was being conducted through a shareholder allocation followed by a general public subscription for forfeited shares.

The airline explained, "Ahead of the general public subscription announcement scheduled for the 30th, the subscription rate of the largest shareholder was low," adding, "To protect investors accordingly, we have reluctantly decided to stop issuing new shares."

The total subscription rate was 52.09%, but the subscription rate of the largest shareholder, T'way Holdings (with a 58.32% stake), was only 25.61%. The employee stock ownership association's preferential subscription rate was 56.69%, and the general existing shareholders' subscription rate was 86.87%.

Regarding this, a T'way Air official stated, "The largest shareholder was unable to secure sufficient funds due to financial institutions' restrictions on handling aviation-related industries while trying to raise funds to participate in the rights offering."

Considering that the subscription warrants from this shareholder allocation rights offering were listed and traded from the 10th to the 16th, T'way Air plans to prepare compensation measures for investors who purchased and hold the subscription warrants through the listed market. The company will also explore various options for raising the necessary funds going forward.

Earlier, in preparation for the expiration of the government's employment retention support fund payment period, T'way Air accepted applications for unpaid leave conversion from all employees until the 27th.

This content was produced with the assistance of AI translation services.