Private equity firm JC Partners and Hong Kong-based logistics firm Korchina will acquire a stake of at least 64.6% in Air Premia if they convert bonds issued by the low-cost carrier, expected to be worth between 50 billion and 65 billion won ($44 million to $57.4 million).
Some reports suggest that they will formalize their takeover in the first half of this year.
The deal brokered by the consortium includes managerial rights, and the stake could be as high as 68.9% if fully converted, industry sources said on Tuesday (March 2). Old shares owned by existing shareholders, including Seouleaguer, have been excluded from the deal. Founding shareholders and affiliates of Seouleaguer own 54% of the common shares.
Air Premia has reportedly decided to accept funds from new financial investors so it can become a hybrid services carrier offering medium- and long-haul routes, even though existing shareholders’ stakes may be diluted after the consortium’s investment.
The airline was valued at around 20 billion won for the deal and its post-value is likely to be about 85 billion won. The exact post-value will be determined by the amount of investment.
Established in July 2017, Air Premia was granted a preliminary government license in March 2019 to operate budget services on condition that it filed for an air operator certificate within one year, but final approval was delayed by the Covid-19 pandemic.
Air Premia will use the capital injection to add 10 Boeing B787 jets to its fleet and finally launch operations in the second half of this year. It will be a long-haul budget carrier.
Korchina, a global freight forwarding and logistics service provider with 42 branch offices and 2500 corporate clients across the globe, is expected to bring synergy to the carrier.
JC Partners plans to use dry powder in its 30 billion won blind-pool fund for the investment. (Reporting by Ar-rum Rho)