Korean Air Lines reports successful share subscription

Korean Air Lines carrier transports Covid-19 vaccines at Incheon International Airport last month. [YONHAP]

Korean Air Lines has received orders for more shares than it made available in a recent offering.

The carrier on Monday reported in a regulatory filing that 182,037,269 shares were subscribed to by its existing shareholders and company employees – higher than 173,611,112 shares allotted.

The two-day subscription period ended on March 5.

A public offering for the airline’s shares will start on Tuesday and last until the next day.

Korean Air Lines will be raising 3.3 trillion won ($3 billion) from issuing the new shares – higher than 2.5 trillion won it originally planned.

The airline was planning to set the price of each share at 14,100 won, but later raised the price to 19,100 won as the company’s share price rose recently on increased expectation for travel again on mass inoculation against Covid-19.

The new shares will start trading on March 24.

Korean Air Lines plans to use the funds to acquire Asiana Airlines.

A total of 1.5 trillion won will be spent to acquire the struggling carrier, while 1.82 trillion won will be spent to repay debt.

Asiana Airlines plans to issue new shares in June.

The Korean Air Lines acquisition of Asiana Airlines will result in the birth of a mega carrier ahead of the time when the economy is expected to improve following the rollout of Covid-19 vaccines.

“Considering the issuance of its new shares, Korean Air Lines has already surpassed its highest market capitalization,” said analyst Choi Go-woon from Korea Investment & Securities, adding that transportation and the company shares are seeing high demand.

The airline’s shares dropped 2.35 percent in trading Monday to 27,050.

BY JIN MIN-JI [jin.minji@joongang.co.kr]

CAPTION: Korean Air Lines carrier transports Covid-19 vaccines at Incheon International Airport last month. [YONHAP]