Eastar Jet selects preferred investor ahead of open auctionEastar Jet has selected a preliminary preferred investor to acquire the financially troubled budget carrier ahead of an open auction next week, people familiar with the matter said Thursday.
Eastar Jet will sign a contract with an unidentified local investor this week and seek approval for the preliminary deal from the Seoul Bankruptcy Court, they said.
Upon approval from the court, the process to select a final bidder, whether the preliminary preferred investor or another one, is expected to begin next week.
Eastar CEO Kim You-sang said the company decided to proceed with the investor selection process in the form of a "stalking-horse" bid.
He didn't confirm the details involving the contract with the preliminary investor.
In the stalking-horse bid, Eastar selects a preliminary preferred bidder for the budget carrier ahead of an auction in which other bidders submit their prices. The stalking horse sets the low-end bidding price so that other bidders cannot underbid the price.
The CEO has said several companies have shown an interest in acquiring Eastar after the bankruptcy court approved the corporate rehabilitation process for the budget carrier in February.
Eastar plans to submit its debt-repayment and other rehabilitation plans to the court by May 20 and aims to resume flights on domestic routes as early as June.