Jeju Air attracts interest from half a dozen companiesSix to seven companies have shown an interest in acquiring Eastar Jet after a local court approved the corporate rehabilitation process for the budget carrier this month, the company's chief executive officer said Thursday.
The Seoul Bankruptcy Court approved the rehabilitation program for Eastar Jet in early February. The court appointed two managers that include Eastar Jet CEO Kim You-sang to oversee the program despite the pilot union's demands to exclude sitting executives from the interim team.
"The six to seven companies have contacted Eastar as they have an intention to make an investment in the carrier. The company will receive a letter of intent from potential investors in March and aims to select one of them as the new owner," Kim told Yonhap News Agency over the phone.
Eastar will submit its debt-repayment and other rehabilitation plans to the bankruptcy court by May 20 and resume flights on domestic routes as early as June, he said.
The company plans to receive an air operator certificate (AOC) from the transport ministry once the court accepts its own rehabilitation programs.
Eastar has suspended most of its flights on domestic and international routes since March last year due to the coronavirus impact on the airline industry, and its AOC became ineffective in May.
"There will be no massive job cuts in the course of the court-led rehabilitation process as many of the employees have already left the company," he said.
Eastar has had difficulties in finding a strategic investor, or a company, since July of last year when Jeju Air scrapped its plan to acquire the low-cost carrier amid the Covid-19 pandemic.
In January, Eastar Jet applied for court receivership to find a way to continue its air transport business through M&A procedures.
The court later ordered preservation measures and comprehensive prohibition to prevent creditors from seizing or selling company assets and to freeze all bonds before the carrier's rehabilitation proceedings.
Deloitte Anjin and Heungkuk Securities advise the deal as lead managers.