Korean Air plans to raise over $800 million to stay afloat

Korean Air Lines Co. plans to sell new shares to raise about 1 trillion won ($817 million) after the coronavirus outbreak wiped out 90% of its flights.

The Seoul-based carrier aims to sell about 79.4 million new shares to existing holders in July, it said in a regulatory filing Wednesday. The price is initially estimated at 12,600 won a share, with the final level to be determined on July 6. Korean Air, which has slumped 36% this year, closed at 18,200 won.

Airlines globally are seeking funds after the virus plunged aviation into crisis. The International Air Transport Association says airlines could require as much as $200 billion in government aid and bailout measures this year to survive, while CAPA Centre of Aviation has warned the pandemic will bankrupt most carriers by the end of May if they don’t get support. Boeing Co. Chief Executive Officer Dave Calhoun said there’s a risk a major U.S. airline could fail.

Korean Air also said it will get 1.2 trillion won in loans from Korea Development Bank and Export-Import Bank of Korea. The state-run lenders last month agreed to provide the funds on condition that Korean Air sold new shares.

Korean Air employees have taken pay cuts of as much as 50%, while more than two-thirds have gone on leave for six months as part of the company’s efforts to lower costs. The airline is also selling non-core assets to raise funds.