Brokerages have cut their price targets on shares of Korean Air after the airline announced its plan to sell new shares worth 450 billion won ($376.1 million).

Korean Air said this week that the new stocks will be sold at 20,450 won each. After the stock offering, the amount of stocks traded on the local stock market will rise to 95.95 million from the current 73.95 million, it said. 

Analysts said the debt-to-equity ratio of Korean Air would jump on losses related to foreign exchange rates, despite the rights issue.

Shares of Korean Air fell 2.19 percent to close at 26,800 won on Friday, underperforming the broader market’s 0.35 percent gain.

Hana Financial Investment reduced its price target on Korean Air‘s stocks to 38,000 won per share from 54,000 won.

“The amount of new stocks is expected to dilute the price of current stocks,” said Shin Min-seok, an analyst at Hana Financial Investment.

Affected by the Korean currency’s weakness against the US dollar, Shin said Korean Air‘s debt-to-equity ratio may surge to 1,300 percent as of the end of December last year, compared with 910 percent at the end of September.

Daishin Securities cut its price target on Korean Air’s stocks to 32,000 won per share from 42,000 won. Samsung Securities and Shinhan Financial Investment also reduced their price targets on Korean Air to 22,000 won and 28,000 won, respectively. (Yonhap)