After entering into legal management, the acquisition cost decreases
Two or three additional candidates for negotiations
Promote the issuance of AOC as soon as the rehabilitation plan passes
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It has been raised that Eastar Jet, which is under legal management, will resume domestic flights as early as June. This is because the merger and acquisition (M&A) work was accelerated as Eastar Jet entered the rehabilitation process and the rehabilitation debt was adjusted.
According to industry sources on the 18th, Eastar Jet will conclude negotiations over the acquisition by mid-May and submit a rehabilitation plan to the Seoul Rehabilitation Court.
Currently, Eastar Jet is negotiating an acquisition through the’stalking hose’ method. The stalking hose is a method of selecting a preferred negotiator and separately proceeding with open competitive bidding, and if it fails, a purchase right is given to the prospective consignee. If another prospective taker offers a higher price than the preferred buyer, the taker can be changed.
Initially, Eastar Jet negotiated with four companies, including construction companies and private equity funds, before filing for court management, but it is reported that the number of candidates for acquisition is increasing, and is negotiating with six or seven companies. Due to legal management, it is expected that the stocks of the majority shareholders will be depreciated or canceled, and the decrease in acquisition costs as the’body’ decreased due to the restructuring and reduction in base size.
Eastar Jet is planning to submit a rehabilitation plan, including financing plans, to the court after finalizing the consignee in April through preliminary and main bidding. The rehabilitation plan includes payment plans for unpaid wages and severance pay of 70 billion won, as well as plans for repayment of rehabilitation bonds.
In addition, Eastar Jet is planning to obtain a reissue of the Air Operation Certificate (AOC) from the Ministry of Land, Infrastructure and Transport as soon as the rehabilitation plan is passed by the court. Eastar Jet suspended all routes in March last year, and AOC was temporarily suspended in May of the same year. Typically, the issuance of AOC takes about three weeks, and the industry predicts that the operation will be possible from June. First, domestic routes such as Gimpo-Jeju and Cheongju-Jeju are mentioned as candidates for operation.
It is also reported that Eastar Jet will proceed with the rehabilitation procedure in the direction of not even restructuring large-scale personnel. Regarding the fact that the court confirmed the necessity of restructuring before deciding to commence the rehabilitation procedure, the management is known to have replied that additional manpower reduction is unnecessary since it is currently maintaining the minimum number of personnel for operation. The number of Eastar Jet employees is expected to remain at the level of 470 for the time being, excluding about 20 people on parental leave and those on natural decline.
/ Reporter Park Si-jin [email protected]
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