This article was posted on the ChosunBiz MoneyMove site at 5:35 p.m. Nov. 14, 2025.
Sono Hospitality Group's holding company Sono International delayed its listing until next year, disrupting plans to use funds raised earlier this year under a pre-IPO arrangement to repay public offering proceeds. The early repayment date for the 210 billion won equivalent exchangeable bonds (EBs) backed by treasury shares is approaching in three months, and the company is weighing whether to repay now or postpone the repayment date. If it decides to repay, industry sources at investment banks predict it will have to go back to issuing mezzanine or other bonds.
Ultimately, Sono International must go public. Beyond tight finances, there is another reason to hurry the listing: a large amount of treasury stock. Because the proportion of treasury shares is so high, there could be strong pressure to "cancel all treasury shares" immediately upon listing.
The diagnosis is that the only option is to quickly improve the performance of T'way Air, which it acquired this year.
According to the investment banking industry, Sono International will be able to repay the 210 billion won treasury share–based EB starting in February next year.
In February this year, Sono International issued EBs using treasury shares as the exchange target and handed them to Woori Investment & Securities. Because treasury shares accounted for nearly 36% of total issued shares and the company was considering how to utilize them, it chose this method of raising funds.
Woori Investment & Securities is said not to be considering converting the EB into shares in the future. It invested with the intention of being repaid principal plus interest. Unlike many other treasury share–based EBs often called "no-interest bonds," where both the coupon and maturity interest rates are set at 0%, Sono International's EB has a relatively high coupon of 5.6%.
Originally, Sono International planned to complete its listing within this year and to early-redeem the EB in February next year. But because of T'way Air's deteriorating performance, it struggled to determine corporate value, missed the timing to file for preliminary listing review, and concluded that listing within the year was impossible, so it postponed the schedule to next year.
Besides the EB, Sono International issued 100 billion won in asset-backed short-term bonds (ABSTB) to DB Investment & Securities this year and issued 200 billion won in private bonds with Woori Investment & Securities as the lead manager. Its subsidiary T'way Air also issued 200 billion won in perpetual bonds.
An IB industry source said, "Sono International appears to have completed most of its fund raising for the year," adding, "but because it cannot guarantee when it will list, it will deliberate on repayment options."
Sono International cannot simply keep postponing its listing. It needs to resolve funds raised through bonds. Also, the ruling Democratic Party of Korea is expected to make mandatory the "cancellation of held treasury shares within one year" through the third revision of the Commercial Act, so if the listing is delayed too long the company could face pressure to cancel all its treasury shares.
Currently, treasury shares account for 35.93% of Sono International's total shares. That is higher than Honorary Chair Park Chun-hee's 33.24% and Chair Seo Jun-hyuk's 28.96% stakes.
Sono International will do everything it can to avoid canceling treasury shares. An IB industry source said, "Sono has made large investments this year in resort renovations, so it is not in a position of ample liquidity," and added, "canceling all treasury shares is realistically impossible."
Sono International must accelerate the turnaround of T'way Air's management to complete the listing and resolve debts such as bonds. Experts point out that the exchangeable bonds carrying 5.6% interest should be repaid quickly.
The problem is that T'way Air's performance shows no signs of improving. The company disclosed that its consolidated third-quarter revenue this year was 449.8 billion won and its operating loss was 95.5 billion won. Revenue rose 13.9% year over year, but operating losses increased nearly 1,500% over one year.
On the street, analysts expect T'way Air to post an operating loss next year as well. The securities firms' average forecast is an operating loss of 7.9 billion won next year.