[Asia Economy Reporter Jang Hyowon] Kenko Aerospace is accelerating contract wins with global leading space companies such as Boeing SLS and Blue Origin, and with the successful securing of large-scale funding, its aerospace business is expected to gain further momentum.
Kenko Aerospace announced on the 26th that the 30 billion KRW convertible bonds (CB) issued to domestic institutional investors have been fully paid.
The coupon rate and maturity interest rate of this CB are both ‘0%’. The company explained that this reflects a high evaluation of the future value of Kenko’s aerospace business, allowing them to secure investment funds under favorable conditions.
Of the 30 billion KRW secured this time, 10 billion KRW will be used for capital increase of its U.S. subsidiary and acquisition of equity from third parties to accelerate space business, including Blue Origin. Additionally, 10 billion KRW each will be invested in expanding domestic facilities to respond to the increasing orders for Airbus passenger-to-freighter conversions and in operating funds such as securing raw materials.
Kenko’s performance improvement this year is also anticipated. Since the COVID-19 pandemic, the global logistics paradigm has prioritized air transportation, with rail and maritime transport becoming alternative means.
The shift in logistics paradigm leads to increased demand for air cargo and freighter aircraft. Sixty percent of total freighter production involves permanently converting existing passenger aircraft into freighters. Kenko’s passenger-to-freighter conversion business (MRO) has continuously received requests from clients to increase production volume in response to these market changes. Based on the funds secured this time, domestic facility expansion will proceed rapidly, significantly contributing to performance improvement this year.
Furthermore, Kenko succeeded in turnkey supply of helicopter assembly processes for the first time domestically at the end of last year, and defense sector performance is becoming visible based on deliveries of attack helicopters to Boeing in the U.S. The space business is also showing continuous achievements, including recent orders for Boeing SLS and participation in Blue Origin’s next-generation rocket engine project, anticipating additional external growth.
A company official stated, “Despite the slowdown in Boeing-related performance due to the prolonged COVID-19 pandemic, Kenko successfully completed funding by receiving high evaluations for its global sales capabilities, localization strategy, and growth potential,” adding, “This CB issuance will further increase Kenko’s value.”
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