LCC Air Premia to be jointly managed by two PE firms

Air Premia Inc., a South Korean low-cost carrier, will be jointly managed by two Seoul-based private equity firms – JC Partners and AP Holdings, according to people with knowledge of the matter on Monday.

On June 30, its largest shareholder JC Partners with a 56.7% stake signed an agreement to sell a 21.4% stake in Air Premia to AP Holdings for 57 billion won ($44 million),

After the transaction, their ownership will be almost balanced. AP Holdings’ stake will increase to 30.4%, while that of JC Partners will decline to 35.3%

They will form a consortium to jointly manage Air Premia, the sources said.

AP Holdings is an early investor in Air Premia. It invested undisclosed sums in the budget carrier in both 2018 and 2021.

The private equity house was set up jointly by Tirebank Co. Chairman Kim Jeong-gyu and former Leisure Q Chief Executive Moon Bo-guk. Tirebank is a domestic tire retailer, and Leisure Q is a travel startup.

The stake deal is based on Air Premia’s enterprise value of 264 billion won, or 900 won per share.

It is three times more than the 85 billion won valuation estimated in 2021, when JC Partners bought the 56.7% stake in the airline for 67 billion won.

RIGHTS OFFERING, IPO

Separate from the stake transaction, Air Premia is seeking to raise up to 100 billion won ($76 million) in a rights offering. Both JC Partners and AP Holdings are said to be buying the new shares as well.

The deal also comes as the LCC is competing to secure “golden routes” to Europe that Korean Air Lines Co. must give up to acquire Asiana.

The proposed Korean Air-Asiana combination is pending approval from the US and Europe, where it faces tougher scrutiny because of monopoly concerns.

Winning a business license in 2019, Air Premia has a fleet of five Boeing 787-9 mid-sized jets. It launched six international routes in July last year.

The LCC is looking to go public by 2026 and secure a fleet of 20 large aircraft by 2030, its Chief Executive Yoo Myung-sub told The Korea Economic Daily last month.

Write to Ji-Eun Ha at hazzys@hankyung.com

Yeonhee Kim edited this article.