Daemyung Sono Group Pursues Acquisition of T'way Air Management Rights... "Entry into the Aviation Industry" (Comprehensive)

Management Improvement Demands Delivered to T'way Air on the 20th and 21st
Requests for Shareholder Registry Inspection and Submission of Shareholder Proposals
Chairman Seo Junhyeok of Daemyung Sono Group: "Entry into the Aviation Industry"
Only a 3 Percentage Point Gap with the Largest Shareholder... Management Rights Dispute Inevitable
T'way Responds: "Reviewing Response Measures from Multiple Angles"

Daemyung Sono Group's Sono International is exploring entry into the aviation industry by securing management rights of low-cost carrier (LCC) T'way Air. However, since the shareholding difference between T'way Holdings Yerimdang, the largest shareholder of T'way Air, and Daemyung Sono Group, the second-largest shareholder, is only about 3 percentage points, a management rights dispute is expected to be inevitable.

Sono International announced on the 22nd that it will intensify its management participation by demanding management improvements from T'way Air, requesting inspection and copying of the shareholder registry, and submitting shareholder proposals.

Earlier, on the 20th, Sono International delivered a management improvement demand letter to T'way Air and CEO Jeong Hong-geun, requesting ▲a complete replacement of the management team and ▲a capital increase for the stable operation of T'way Air. It also requested on the 21st the submission of shareholder proposals for agenda items at the regular shareholders' meeting scheduled for March and inspection and copying of the shareholder registry.

In the management improvement demand letter, Sono International pointed out, "T'way Air currently cannot guarantee the reliability of aviation safety," adding, "Considering the insufficient maintenance costs and personnel, and the high rate of improvement instructions due to aviation safety supervision, there is a lack of awareness regarding the importance of aviation safety." It further stated, "The brand image is being damaged due to the lack of operational reliability evaluated by the Ministry of Land, Infrastructure and Transport and the imposition of fines following a series of administrative measures," emphasizing that "a comprehensive review of safety is necessary."

Additionally, through shareholder proposals, Sono International plans to request the submission of an agenda for the appointment of new directors and aims to form a new board of directors to establish a stable airline operation strategy, maximize synergy between the aviation and hospitality industries, and improve the financial structure.

Sono International explained, "This is a proactive measure to prioritize the growth of T'way Air and enhancement of shareholder value," adding, "We delivered this management improvement demand and shareholder proposals to strengthen financial soundness and corporate competitiveness and to establish a foundation for long-term growth."

Previously, Daemyung Sono Group secured a 26.77% stake in T'way Air for about 176 billion KRW in July last year. Sono International, the holding company, purchased a 14.9% stake from private equity firm JKL Partners for 105.6 billion KRW, and in August, its affiliate Daemyung Sono Season exercised a call option to acquire the remaining 11.87% stake for 70.8 billion KRW.

Currently, the largest shareholders of T'way Air are T'way Holdings (28.05%) and Yerimdang (1.72%). Including related parties, their combined stake is 30.08%. Compared to the Daemyung Sono Group's stake (Sono International 16.77% and Daemyung Sono Season 10.00%), the gap is only 3.31 percentage points. Excluding the employee stock ownership association's 2.91%, more than 40% of the remaining shares are held by minority shareholders. Therefore, the choices of minority shareholders are expected to determine the outcome of this regular shareholders' meeting.

Seo Jun-hyuk, Chairman of Daemyung Sono Group. Provided by Daemyung Sono Group

Initially, Sono International drew a line by stating that its acquisition of T'way Air shares was a strategic investment without consideration of management rights acquisition, but it changed its stance within half a year and openly expressed its enthusiasm for entering the aviation industry. In October last year, it also acquired 50% of the shares of JC Aviation No.1 Limited Partnership, the second-largest shareholder of another LCC, Air Premia. It also holds a call option to purchase the remaining 50% of the shares after June this year.

Seo Jun-hyeok, chairman of Daemyung Sono Group, said, "We will maximize customer satisfaction of T'way Air and contribute to enhancing shareholder value through the launch of various products and strengthening customer service utilizing Daemyung Sono Group's abundant domestic and international infrastructure," adding, "We will make this entry into the aviation industry a new growth engine for Daemyung Sono Group and leap forward as a global leading company."

Meanwhile, T'way Air briefly responded to Sono International's various demands by stating, "We are reviewing response measures from multiple angles."

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