Forming a Coalition through the 'Act' Platform and Launching Full-Scale Action
"Exercising Shareholder Rights by All Lawful Means"
Minority shareholders of T'way Air, embroiled in a management dispute between the first and second largest shareholders, Daemyung Sono Group and Yerimdang, have begun active shareholder actions. With the difference in shareholding between the first and second largest shareholders being only about 3 percentage points, the direction of the minority shareholders' stake, which accounts for 40%, is crucial, and they intend to raise their voices actively.
On the 10th, minority shareholders of T'way Air announced that they have formed a minority shareholder coalition through the minority shareholder platform 'Act' and sent a shareholder letter to the company on the 7th, signaling the start of full-scale shareholder actions targeting T'way Air, Yerimdang, and Daemyung Sono Group.
As of the 7th, 'Act' has gathered minority shareholders holding a 2.44% stake (about 5.26 million shares). Since the initial gathering in February, 3.33 million shares have been added within five days. Support for shareholder actions continues, and minority shareholders are rapidly consolidating. The T'way Air shareholder coalition expressed concern that "after Daemyung Sono Group secured shares in T'way Air, they might push for a large-scale paid-in capital increase or aggressively pursue mergers with other airlines, which could severely damage share value." They demanded "a fair and transparent acquisition through a public tender offer, along with disclosure of acquisition purposes, long-term management strategies, and financial plans to protect shareholder value."
The management dispute over T'way Air began in earnest in January when Daemyung Sono Group sent a management improvement request to T'way Air, including a complete replacement of management and a paid-in capital increase allocated to shareholders. Currently, T'way Holdings and Yerimdang hold 30.09% of T'way Air shares, while Daemyung Sono Group holds 26.77%. The difference in shareholding between the first and second largest shareholder alliances is about 3 percentage points. The opinions of minority shareholders, who hold about 40%, are critical.
The shareholder coalition aims to consolidate more than 10% of shares within this month. After consolidation, they plan to exercise shareholder rights such as convening an extraordinary general meeting and submitting shareholder proposals, as well as engaging with institutional investors like private equity funds. They are also prepared to take legal action if necessary.
A representative of the T'way Air minority shareholder coalition stated, "Despite the importance of minority shareholders in this merger and acquisition (M&A), minority shareholders are being marginalized by all parties involved ? Daemyung Sono attempting the acquisition, Yerimdang trying to block it, and T'way Air itself." He added, "We will use all lawful and legitimate means to exercise shareholder rights and prevent damage to T'way Air's shareholder value."
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