Air Busan (BX, Busan) plans to issue 43.5 million new common shares with the aim of raising KRW200.1 billion won (USD160 million), it said in a series of stock exchange disclosures on May 31. Meanwhile, the budget carrier’s cash-strapped parent, Asiana Airlines (OZ, Seoul Incheon), will buy additional stock to raise its shareholding to just under 42%.
A general meeting of shareholders approved the stock offering, the proceeds of which will be used to finance operations and for debt repayment. The 43.5 million shares will be sold to the company’s shareholders at a price of KRW4,600 (USD3.68) per share.
Due to the inevitable dilution of the stock’s value, Air Busan’s share price declined sharply on the news. The airline had previously said that it would reduce the number of its existing 190 million common shares by a third to improve its financial structure.
Also on May 31, Air Busan’s biggest shareholder Asiana Airlines announced in a filing that it would be increasing its stake to 41.98% by acquiring additional shares in the low-cost carrier. It will acquire 17,709,652 shares in Air Busan for KRW81,464,399,200 (USD65.1 million). The expected date of the acquisition is September 27.
“This stock acquisition is to improve the financial structure by expanding Air Busan’s capital and maintain control,” Asiana Airlines said.
Air Busan continues to resume international routes as pandemic-era travel restrictions ease, most recently opening two services to Japan, linking Seoul Incheon with Osaka Kansai and Busan with Fukuoka. According to the ch-aviation capacities module, both routes are initially 1x weekly, with Seoul-Osaka later rising to 2x. They join the already-launched Seoul Incheon-Tokyo Narita, and later in the summer Seoul-Fukuoka and Busan-Osaka will also start.
