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Parent firm to inject 300 bln won into Korean Air amid virus woes

Finance 11:41 May 14, 2020

SEOUL, May 14 (Yonhap) -- Hanjin KAL Corp., the parent firm of Korean Air Lines Co., said Thursday it will inject 300 billion won (US$244 million) into the carrier to help it ride out the impact of the coronavirus pandemic on the airline industry.

Hanjin KAL's board of directors has decided to inject the money into Korean Air's planned rights issue worth 1 trillion won according to its stake in the carrier, the company said in a statement.

"The company will raise the funds by selling assets and taking mortgage loans from local lenders. Specific details will be finalized at a board meeting in the near future," the statement said.

Hanjin KAL owns a 29.96 percent stake in the country's biggest full-service carrier.

On Wednesday, Korean Air said it will raise 1 trillion won by issuing new shares as part of self-help measures amid growing concerns over the COVID-19 impact on air carriers and their bottom lines.

The rights issue is one of the options that Korean Air has reviewed to raise the capital needed to ride out the coronavirus crisis.

Shareholders of Korean Air will be given the rights to buy 79 million stocks to be issued at 12,600 won per share. The new shares will be listed on July 29.

Korean Air has suspended more than 90 percent of flights on international routes since late March, as an increasing number of countries have closed their borders or have taken other measures related to incoming passengers.

In its self-help measures, Korean Air had 70 percent of its 20,000-strong workforce take paid leave for six months starting April 16, and it is in the process of selling non-core assets to secure cash.

This undated file photo shows planes of Korean Air and Asiana Airlines at Incheon International Airport, west of Seoul. (Yonhap)

kyongae.choi@yna.co.kr
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