Eastar Jet (ZE, Seoul Gimpo) plans to file for court receivership by the end of January in a last-ditch effort to find a new investor, an airline representative revealed to MTN News and Yonhap News Agency on January 13.
One step short of bankruptcy in South Korea, receivership means that a court decides whether a company can be saved and, if so, how.
The financially challenged low-cost carrier, still without an AOC, has so far not succeeded in hooking a strategic investor since July 2020, when Jeju Air (7C, Jeju) scrapped a plan to acquire its smaller competitor.
Earlier in January 2021, it claimed to be in the final stages of negotiations with an unnamed construction company in Korea’s southwestern region of Honam, but these talks have now ended.
“Eastar aims to find a new investor through a court-led rehabilitation scheme,” the representative of the airline said, adding that there was a possibility for rehabilitation rather than liquidation.
The goal is to cancel some of Eastar Jet’s debt during the legal management process, which would increase the likelihood of a sale to a prospective buyer.
“We plan to make a bid proposal again for companies that have previously shown an intention to take over the company, after reducing its size through legal management,” the representative told MTN.
Meanwhile, Eastar Jet recently moved out of its headquarters in the Gangseo-gu suburb of Seoul as the building’s owner requested eviction due to late rent payments. This has prompted it to move temporarily to a branch office at Seoul Gimpo Airport, according to MTN.
The company recently laid off 600 employees and aims to cut its fleet to six aircraft. It currently has an inactive fleet of five B737-800s and two B737-8s, according to the ch-aviation fleets module.
