Sono International, which started as Pohang-based construction company Daemyung Construction and built a "resort kingdom," may restart its initial public offering (IPO) this year. Attention is focusing on the IPO timetable for Sono International, which said last year it would postpone its market debut. In Aug. last year, Sono International decided to apply for a preliminary listing review with the Korea Exchange (KRX) but then delayed it.
According to the retail industry on the 27th, Sono International has pushed its IPO schedule to the first half of 2027. Some predicted the listing could be moved up, citing a bullish securities market this year, but the position for now is that normalizing T'way Air must come first.
Postponing its plan to debut on the stock market in Aug. last year, Sono International said, "This schedule adjustment is not a simple delay but a proactive choice to firmly enhance the corporations' long-term value," adding, "Preemptively resolving T'way Air's capital impairment issue is judged desirable for protecting T'way Air's minority shareholders and, further, shareholders who will become investors in Sono International."
Sono International made this decision because T'way Air's financial condition is not good. In Dec. last year, T'way Air disclosed a 100 billion won rights offering, of which 50 billion won is the share of its largest shareholder, Sono International.
It is also a burden for T'way Air that it took over European routes such as Rome, Paris, Barcelona and Frankfurt from Korean Air Lines. As routes increase, aircraft lease expense will inevitably rise, and fuel costs could also grow. The problem is that attracting passengers is not easy due to the exchange rate. When the won is strong (a lower exchange rate), overseas travel becomes more frequent, but when the won is weak, it is hard to decide on overseas trips. The won-euro exchange rate has recently been in the 1,700-won range.
A securities firm official said, "In this situation, if Sono International pushes ahead with an IPO, there is a problem that the narrative could be distorted." The point is that it would be hard to imprint on investors a future narrative that the company's value could rise further through the listing of Sono International. The official said, "Investors could misunderstand that Sono International, which aggressively stepped in to support T'way Air, is preparing a listing to raise funds," adding, "The company said there is no need to prepare a listing while inviting such misunderstandings."
In fact, analysis also emerged that proceeding with a listing in this situation would lower the valuation. Even if the resort and hotel business is stable, there could be a discount effect applied to the airline subsidiary. A securities firm official said, "Recently, airline stocks' price-to-earnings multiples are about 20% to 30% discounted compared with boom times," adding, "In this situation, it would be difficult to gain a high valuation and debut on the stock market."
A retail industry official said, "Maximizing the company's value by connecting domestic and overseas resort businesses with the airline business at Sono Hospitality Group has long been the dream of Chairman Seo Jun-seok of Sono Hospitality Group," adding, "From the standpoint of waiting for the best time, this was a strategic delay, and it is expected to proceed again in the first half of 2027."