Asiana Airlines exercises conversion rights on Air Busan's 100 billion won perpetual convertible bonds

Asiana Airlines said Monday it has decided to exercise conversion rights on Air Busan's sixth-series perpetual convertible bonds, valued at 100 billion won, to improve the low-cost carrier's financial structure.

The airline said the decision reflects both an investment view on Air Busan's potential for higher corporate value and the carrier's recent emergency management situation. Asiana said it aims to keep Air Busan financially sound and complete a stable integration on schedule.

Asiana said Air Busan has achieved an earnings turnaround since 2023, posting stronger operating results and higher profit margins than rivals, but that the carrier's corporate value remains undervalued.

The airline expects Air Busan's value to rise after the planned integration of low-cost carriers in the first quarter of next year, as procurement optimization, resource efficiency and higher utilization rates generate revenue and cost synergies.

The conversion will reduce Air Busan's annual interest burden by around 6 billion won. Asiana also said the move eliminates future interest rate step-up obligations, which should further strengthen the carrier's capital structure.

"We will work to maintain Air Busan's financial health and enhance its corporate value," an Asiana Airlines official said. "We will also continue to build future competitiveness through the integration."