Air Premia aircraft. /Courtesy of Air Premia

This article was published on May 28, 2025, at 4:48 p.m. on the ChosunBiz MoneyMove site.

Daemyung Sonogroup and JC Partners, which decided to sell 22% of the shares in low-cost airline Air Premia, are in a favorable position regardless of the outcome of the deal. If Tire Bank's affiliate AP Holdings pays the acquisition price as contracted, it can make a significant profit and exit, and even if AP Holdings' acquisition fails, it can forfeit the deposit of 20 billion won already received.

The industry views that the likelihood of AP Holdings, which has the strong "backing" of Tire Bank, failing to acquire Air Premia is low. If AP Holdings breaches the contract, Sonogroup and JC Partners can forfeit the deposit under civil law. Nevertheless, Sonogroup and JC Partners have documented the forfeiture condition in the contract to mitigate potential risks.

According to investment banking (IB) industry sources on the 28th, AP Holdings must pay 99.4 billion won of the acquisition price for the 22% equity in Air Premia by the end of September. The total acquisition price is 119.4 billion won, of which 20 billion won was paid to Sonogroup and JC Partners earlier this month as a deposit. The acquisition funds are set to be covered by the financially capable affiliate Tire Bank.

If AP Holdings fails to complete the closing (payment completion) by the end of September, Sonogroup and JC Partners can forfeit the deposit of 20 billion won. The 20 billion won will be equally shared between Sonogroup and JC Partners, and the 46% equity currently held by AP Holdings has been contracted to allow Sonogroup and JC Partners to sell publicly (drag-along).

Currently, Sonogroup and JC Partners each hold 11% of the equity in Air Premia. JC Partners has agreed to sell its 11% stake to Sonogroup, but because AP Holdings has decided to acquire the full 22%, the equity transaction between Sonogroup and JC Partners is on hold until the end of September.

An IB industry official noted, "Since Tire Bank has decided to support AP Holdings financially through methods such as convertible bond (CB) acquisition, unless there are significant variables, the closing is likely to proceed without issue. However, the judicial risks remain, as Kim Jeong-kyu, chairman of Tire Bank, recently received a prison sentence for tax evasion and embezzlement, so creating a safeguard of forfeiting the deposit has been a smart move for Sonogroup and JC Partners."

If AP Holdings unexpectedly withdraws from the share acquisition decision, Sonogroup and JC Partners may pursue a public sale, and there is also a possibility that Sonogroup may participate again. This is because if Air Premia actively expands its U.S. routes this year, there is a potential for rapid improvement in performance.

The company plans to increase the frequency of flights on the Los Angeles (LA) route from 7 times a week to 10 times starting on the 30th until July 5, and from July 6, it will operate 11 times a week. The San Francisco route has also been expanded from 4 times a week to 5 times.