Air Premia to raise W110b in rights offering to shore up finances

Air Premia announced Tuesday it will pursue a rights offering worth 110 billion won ($75 million) to improve its financial structure.

The offering will proceed on a shareholder-priority basis, with the airline issuing 550 million new common shares to raise approximately 110 billion won. The record date for new share allocation is Aug. 19, with the subscription period set for Sept. 18 and payment due Sept. 29.

Uncertainty in the aviation industry's operating environment has persisted amid a prolonged high exchange rate and rising fuel price volatility. Air Premia plans to use the proceeds to improve its financial structure and strengthen its business foundation, stabilizing its financial base and securing medium- to long-term growth drivers.

The rights offering is part of a financial restructuring plan the airline submitted to the Ministry of Land, Infrastructure and Transport. The company aims to build a sustainable growth trajectory and a stable management foundation on the back of the capital increase.

Air Premia received a financial restructuring order from the Ministry of Land, Infrastructure and Transport in September 2024 and must reduce its capital impairment ratio to below 50 percent by this September. According to its audit report, the airline posted an accumulated deficit of 214.4 billion won as of the end of last year, with its capital impairment ratio at 131.8 percent.

Park Gwang-eun, Air Premia's head of management, said the rights offering is "a process of laying the groundwork for financial restructuring and sustainable growth," adding that the airline will "continue to strengthen its business competitiveness to meet the trust of customers and the market."

Meanwhile, Air Premia continues to operate long-haul routes centered on the Americas and is preparing to launch new Asian routes during this year's winter flight schedule. The airline plans to press ahead with its growth strategy, including the new route launches, on the strength of the latest capital raise.