Eastar Jet Co.’s aircraft are grounded at Incheon International Airport, west of Seoul, on June 23, 2021, in the file photo. (Yonhap)
SEOUL, Nov. 12 (Korea Bizwire) — A Seoul court on Friday approved the restructuring plans submitted by Eastar Jet Co. paving the way for the budget carrier to resume flights amid an accelerating vaccination campaign.
The Seoul Bankruptcy Court’s approval has cleared the way for local property developer Sung Jung Co. to finalize the deal to acquire an 80 percent stake in Eastar Jet for 108.7 billion won (US$97 million).
Eastar is required to first pay about 70 billion won in unpaid wages and retirement allowances to current and former employees.
With the rest of the deposit, the company has to negotiate with its creditors to settle the debt repayment rate for more than 200 billion won tied to its aircraft leasing, airport usage and other operation costs.
In follow-up steps, the carrier aims to receive an air operator certificate from the transport ministry by January and resume domestic flights in February, a company spokesman said.
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 2020.
It has had difficulties in finding a strategic investor since July last year, when Jeju Air Co. scrapped its plan to acquire the carrier amid the prolonged 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 approved the corporate rehabilitation process for the carrier in the following month.
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.
(Yonhap)
