This article was published on May 7, 2025, at 10:44 a.m. on the ChosunBiz MoneyMove site.
The management rights of low-cost carrier (LCC) Air Premia have been seized by AP Holdings, the existing largest shareholder. AP Holdings, a company owned by the owner family of Tire Bank, was expected to engage in a management rights dispute with the second-largest shareholder, Sono International, over Air Premia, but ultimately chose to buy all of Sono's equity instead of escalating the dispute.
AP Holdings has poured 120 billion won into acquiring Sono's equity this time and is in a situation where it needs to conduct a capital increase of over 100 billion won for aircraft maintenance and other issues. Given that AP Holdings has a mere capital of 1 billion won, it is expected to issue convertible bonds (CB) again, as it did in 2023, to receive a significant investment from its affiliate, Tire Bank. Tire Bank has reportedly strengthened its collateral loan capacity following a real estate asset revaluation last year, likely preparing to support AP Holdings financially.
◇ Two years ago, Tire Bank also gave 53.3 billion won through CB.
According to the investment banking (IB) industry on the 7th, AP Holdings is required to pay 119.427 billion won to the second-largest shareholder of Air Premia, Sono-JC Partners, by the end of September. This is to acquire the 22% equity owned by Sono-JC Partners. Once the payment for the acquisition is completed, AP Holdings will hold about 70% of Air Premia's equity, acquiring a solid control structure that prevents hostile M&A attempts by third parties.
Currently, all the equity of AP Holdings is held by Kim Jeong-kyu, the chairman of Tire Bank, and his family. Chairman Kim holds 20%, while his three children, Kim Seung-yeon (born in 2001), Kim Sung-yeon (born in 2003), and Kim Soo-yeon (born in 2006), have 25%, 25%, and 30%, respectively. Chairman Kim serves as the CEO, while his wife, Jo Soon-hee, is a registered director, making it a typical family-run business.
How will AP Holdings secure the 120 billion won required for acquiring equity? This company is merely a 'shell' established by Chairman Kim to acquire the management rights of Air Premia, with no sales and a net loss of 13 billion won (as of last year). Its capital is only 1 billion won.
Therefore, the funds needed for this acquisition of Air Premia's equity will likely come from Tire Bank or Chairman Kim's own pockets. In fact, when AP Holdings acquired 30.42% equity of Air Premia from JC Partners last year, Tire Bank supported AP Holdings by purchasing 53.3 billion won of the total 81 billion won convertible bonds issued by AP Holdings. The conversion period is as long as seven years. It is estimated that the remaining 27.7 billion won was likely supported by Chairman Kim personally or another related company.
Even after paying 120 billion won to Sono, Tire Bank is required to inject over 100 billion won into Air Premia. Air Premia has not overcome its capital impairment status and received an improvement order from the Ministry of Land, Infrastructure and Transport last year, but the planned capital increase of 100 billion won was thwarted due to opposition from AP Holdings, resulting in ongoing financial difficulties. Recently, the company also faced a situation where operations were suspended due to failure to complete aircraft maintenance on time. It is expected that the 100 billion won needed to resolve these issues will also have to be supported by Tire Bank or Chairman Kim.
◇ Tire Bank revaluated its real estate... Will it increase collateral loans to support AP Holdings?
The extent of Chairman Kim's personal assets remains shrouded in mystery. In contrast, Tire Bank's financial situation is somewhat publicized, suggesting that it is not in a robust cash position to support thousands of billions of won.
At the end of last year, Tire Bank's liquid assets (assets that can be converted to cash within a year) were 179.3 billion won, which was less than its current liabilities (debts due within a year) of 193.1 billion won. Its cash and cash-equivalent assets amounted to only 37.1 billion won.
Instead, Tire Bank has been financing cash by using its real estate assets across the country as collateral. As of last year-end, its non-liquid assets reached approximately 870 billion won, with land and buildings accounting for 383.4 billion won and 158.3 billion won, respectively.
Tire Bank was also subject to a real estate asset revaluation last year. It reportedly reflected a revaluation profit of 227.2 billion won in other comprehensive income and significantly increased the maximum amount of collateral loan obligation. For example, the maximum amount of collateral for KB Kookmin Bank for real estate in Sejong City has increased from 54 billion won to 96.9 billion won in just one year.
An IB industry official noted, "When the collateral value rises through real estate asset revaluation, one can either cancel existing mortgage rights and raise the maximum loan amount or maintain existing loans while establishing new mortgage rights." He explained that it is common to undergo asset revaluation for better collateral loan conditions.
There is also a method where Chairman Kim receives dividends from Tire Bank to support AP Holdings. According to the end of last year, Tire Bank's undistributed retained earnings amounted to 535.3 billion won. With Chairman Kim's equity stake nearing 92.99%, it is possible for him to monopolize a large amount of dividend payments. If Tire Bank distributes dividends this year, it would be the first time for Chairman Kim to receive dividends since 2021 (30 billion won).
◇ Loaning 84 billion won to an unlisted company fully controlled by children.
Chairman Kim is not only providing massive financial support through Tire Bank for AP Holdings, which he established for succession purposes. If AP Holdings is the vehicle for transferring Air Premia, then Success Will Be Made plays another key role in Kim's succession structure.
Success Will Be Made, established at the end of 2017, has Chairman Kim's three children holding equity at 33%, 33%, and 34%, respectively. Like AP Holdings, the youngest, Kim Soo-yeon, has the highest equity stake by a slight margin.
This company has subsidiaries such as Beongyeong Building, Polytech, Seonnong General Foods, and Wonpoong Pharmaceutical Co., Ltd. It generates an annual consolidated revenue of 83.9 billion won and an operating profit of 10 billion won, but it is presumed to have a high dependence on Tire Bank, similar to AP Holdings. As of last year-end, the amount borrowed from Tire Bank reached 82.4 billion won.