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Exterior view of AK Group headquarters. (Photo courtesy of AK Group) |
[Alpha Biz= Kim Jisun] South Korea’s AK Group has taken out another stock-backed loan using approximately 9% of its stake in Jeju Air (KRX: 089590) as collateral, effectively pledging nearly all of its shares in the budget airline. The move comes as the conglomerate seeks to improve its financial structure through the planned sale of Central Country Club (Jungbu CC) and its stake in Aekyung Industrial (KRX: 018250), while aiming to retain control of Jeju Air for a potential turnaround.
However, Jeju Air’s continued stock underperformance is fueling concerns about forced sales (margin calls), which could further erode AK Group’s control over the airline.
According to the investment banking industry on June 7, AK Holdings (KRX: 006840) secured a ₩50 billion (approx. USD 36 million) stock-backed loan from Shinhan Capital on May 28. The collateral includes an 8.93% stake in Jeju Air and a 4.43% stake in Aekyung Industrial. The loan carries an interest rate of 5.9% and matures on May 28, 2026, with a collateral maintenance ratio of 120%.
As of the end of March, AK Group held a combined 53.61% stake in Jeju Air—50.37% by AK Holdings, 3.22% by Aekyung Asset Management, and a nominal 0.01% by four executives. Of this, around 50% has been pledged as loan collateral, leaving just 3.61% unencumbered. Specifically, 47.5% of the stake held by AK Holdings and 1.9% by Aekyung Asset Management are under stock-backed loan agreements. Although AK Plaza does not directly hold shares in Jeju Air, it has also used a 0.6% stake in Aekyung Asset Management as collateral for a separate loan.
The total amount of financing raised through Jeju Air shares by AK Holdings and affiliates now stands at ₩260.8 billion—roughly half of Jeju Air’s market capitalization of ₩533 billion as of June 2. AK Holdings accounts for ₩233.5 billion of the total, with interest rates ranging from 4.9% to 6.3%. The creditors include Hana Bank, NH Nonghyup Bank, KB Securities, NH Investment & Securities, and Shinhan Capital.
Meanwhile, Aekyung Asset Management has raised ₩15 billion at rates between 5.3% and 5.6%, while AK Plaza secured ₩12.3 billion at 5.68%. KB Kookmin Bank and Cape Investment & Securities hold collateral rights to the Aekyung Asset Management shares, while KB Kookmin Bank is the collateral holder for AK Plaza.
As Jeju Air's stock remains stagnant, the possibility of forced liquidations threatens to weaken AK Group’s grip on its flagship airline.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
