1. T’way Air’s BW Issuance: What Happened?
T’way Air will issue ₩50 billion worth of BW through private placement. These funds are planned to be used for securing operating funds and introducing new aircraft. The exercise price of the BW is ₩1,954, the coupon rate and maturity rate are 5.50%, and the payment date is August 21, 2025. The exercise period is from August 22, 2026, to July 21, 2025.
2. Why the BW Issuance?
Although T’way Air is showing sales growth due to the recovery of international passenger demand, operating losses are expanding due to increased fuel and operating costs, as well as fixed cost burdens from the introduction of new aircraft. The high debt ratio (4,353%) also acts as a financial burden. Therefore, it is analyzed that the BW issuance aims to improve the financial structure and secure investment funds for future growth.
3. The Impact of the BW Issuance
- Positive Impacts: Improved financial soundness, securing operating and investment funds, potential capital increase effect upon future stock price increase.
- Negative Impacts: Potential for stock dilution, interest payment burden of 5.50% per annum, increased stock price volatility, repayment burden at maturity.
The current recovery trend in travel demand is a positive factor, but exchange rate and oil price volatility remain risk factors. Interest rate conditions can affect the interest burden at the time of BW issuance.
4. What Should Investors Do?
Investors should consider both the positive and negative aspects of the BW issuance. It is important to make investment decisions by carefully monitoring T’way Air’s earnings improvement, BW conversion trends, and the outlook for the airline industry. In particular, attention should be paid to improvements in operating efficiency and profitability following the introduction of new aircraft.
Frequently Asked Questions
What are Bonds with Warrants (BW)?
BWs are securities that combine bonds and warrants. Investors can receive interest like bonds, and at the same time, have the right (warrant) to buy the issuer’s shares at a predetermined price (exercise price) within a certain period.
How will T’way Air’s BW issuance affect its stock price?
The BW issuance can have both positive and negative impacts on the stock price in the short term. Immediately after the issuance, the stock price may rise on the news of fundraising, but in the long term, the stock price may fall due to the potential for stock dilution from the exercise of the BW.
Should I invest in T’way Air?
Investment decisions should be made based on your own judgment. It is important to make careful investment decisions by comprehensively considering T’way Air’s financial situation, earnings outlook, and airline industry trends.
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