Jeju Air Cancels Stock Purchase Agreement with Eastar Jet

"Contract Termination Decided Due to Significant Breach of Statement Guarantee Unrectified and Expiration of Transaction Closing Period"

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Je-hoon] Jeju Air has terminated the stock purchase agreement (SPA) with Eastar Holdings for Eastar Air. As a result, Jeju Air's acquisition and merger (M&A) of Eastar Air, which had been ongoing for over seven months, has been finally canceled.

Jeju Air announced on the 23rd that it would terminate the SPA signed with Eastar Holdings last March due to a significant breach of representations and warranties that was not remedied and the expiration of the transaction closing period.

Jeju Air had previously exchanged a memorandum of understanding with Eastar Holdings on December 18 last year for the acquisition of Eastar Air, citing "economies of scale," and signed the SPA in March. However, after the outbreak of the novel coronavirus disease (COVID-19), various unpaid debts emerged as issues, leading Jeju Air to reconsider the acquisition.

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