Fly Gangwon to Secure 20 Billion Won in Operating Funds

[Asia Economy Reporter Dongwoo Lee] Fly Gangwon is expected to accelerate management stabilization by securing 20 billion KRW in operating funds as early as this month.

According to the aviation industry on the 12th, Joo Won-seok, CEO of Fly Gangwon, is currently in the process of selling his shares in Ayum (formerly Fly Yangyang Development). Ayum operates resort businesses such as the development and supply of non-residential buildings located in Gangwon Province.

As of last year, Joo and his related parties hold 73.16% of Ayum's shares. The industry expects that if CEO Joo sells his shares in Ayum this month, he will be able to secure funds worth approximately 20 billion KRW. The selling company is currently undergoing due diligence, and specific negotiations are reportedly underway.

Previously, CEO Joo planned to maximize synergy effects in attracting overseas tourists through Fly Gangwon and resort businesses in line with Yangyang County's 'region-specific customized specialized tourism infrastructure creation' for the development of the East Coast comprehensive leisure resort.

However, Fly Gangwon, facing the prolonged COVID-19 situation, has suspended its originally planned international flights, resulting in continued capital erosion in the first quarter of this year following last year. CEO Joo intends to use the funds secured from the sale to cover monthly aircraft lease fees, maintenance costs, and labor costs amounting to about 300 million KRW for Fly Gangwon's operations.

Furthermore, if self-rescue measures succeed, it is expected to secure support funds worth approximately 6 billion KRW from the Gangwon Provincial Government.

The Gangwon Provincial Council partially amended the ordinance on financial support for air carriers using regional airports in Gangwon Province last year and began funding Fly Gangwon. However, the council set a condition that Fly Gangwon must secure about 12 billion KRW, roughly twice the amount of the support funds.

A Fly Gangwon official said, "If the share sale is completed as early as this month, we expect to secure a total of 20 billion KRW in operating funds."