Eastar Air to Hold Stakeholders' Meeting... Resolution on Rehabilitation Plan Scheduled

If Over Two-Thirds of Creditors Agree, Rehabilitation
Seongjeong to Pay Termination Compensation to Ssangbangwool and Gwangrim Consortium

Employees are entering the temporary shareholders' meeting held on the 9th at the Eastar Jet headquarters in Gangseo-gu, Seoul, amid growing concerns over mass unemployment in the aviation industry following Eastar Jet's notification of layoffs to 605 employees. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Dongwoo Lee] The fate of Eastar Jet's rehabilitation will be decided on the 12th.

According to the aviation industry, Eastar Jet will hold a creditors' meeting at 2 p.m. at the Seoul Bankruptcy Court to determine whether the creditors agree to the rehabilitation plan. If more than two-thirds of the creditors agree to the rehabilitation plan submitted by Eastar Jet, the court will approve the plan.

Earlier, Seongjeong, Eastar Jet's preferred negotiator, paid approximately 63 billion KRW as the remaining acquisition payment on the 5th. Additionally, on the 4th, Eastar Jet submitted a revised rehabilitation plan to the Seoul Bankruptcy Court, estimating the total debt amount at 350 billion KRW. The creditor repayment rate increased from the previous 3.68% to 4.5%, which is expected to positively influence obtaining the agreement of more than two-thirds of the creditors at the meeting.

Meanwhile, along with the payment of the remaining acquisition funds, Seongjeong paid 100 million KRW as a topping fee to the Ssangbangwool-Kwangrim consortium. By paying the topping fee, the Ssangbangwool-Kwangrim consortium reportedly lost its status as the next-in-line acquisition candidate.

If Eastar Jet obtains the agreement of more than two-thirds of the creditors and the court approves the rehabilitation plan, it plans to immediately begin the process of applying for an Air Operator Certificate (AOC) to normalize operations.

The average period required to reacquire the AOC is about five months, so Eastar Jet's commercial flights are expected to resume as early as March next year.

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