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[Alpha Biz=(Chicago) Reporter Kim Jisun] Korea Aerospace (KAI) has decided to make a lump-sum repayment of corporate bonds worth 300 billion won that are due to mature in November. Following the repayment of 200 billion won in corporate bonds maturing in May, the company repaid 500 billion won worth of debt this year alone.
According to the industry on the 20th, KAI decided to repay, rather than refinance, 300 billion won of unsecured corporate bonds due in November. This is a corporate bond issued at an interest rate of 1.79% in November 2020. KAI also repaid 200 billion won in corporate bonds with maturity in May.
As of the first half of the year, KAI's debt ratio was 422%, the highest in five years. Most of the debt is ‘good debt’ based on advance payments from large-scale orders. Usually, when an order for a fighter jet is received, an advance payment is received, but this is counted as a liability rather than profit. Once the order is completed, the advance payment is converted into profit.
Last year, KAI signed a contract with Poland to export 48 light attack aircraft FA-50. It is a large-scale order worth 4.2 trillion won in down payment alone. Civil business orders from Boeing and Airbus also increased by 62% compared to the previous year as of July, and cash is expected to flow in earnest starting next year.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
