Korean court launches Eastar Jet rehabilitation process

Seoul Bankruptcy Court initiated on February 4 corporate rehabilitation proceedings at Eastar Jet (ESR, Seoul Gimpo), three weeks after granting the grounded carrier insolvency and providing protection from creditors. The court appointed two managers, including Eastar senior vice president Kim You-sang, to oversee the restructuring, rejecting a request from the company’s pilot union to exclude executives from the team of interim caretakers, Yonhap News Agency reported. The airline welcomed the court’s decision to commence the process. The court requested Eastar-related financial statements from creditors and shareholders including bond and security rights certificates, which must arrive at the court between the dates of February 19 and March 4. It also instructed Eastar Jet to submit a restructuring plan to the court by May 20, which creditors and shareholders would then need to vote on. As previously reported, Eastar Jet views the court receivership process as a means of continuing its air transport business via mergers-and-acquisitions procedures. “I am grateful for the court’s decision to commence rehabilitation procedures and will try to achieve normalisation of business as quickly as possible,” Kim You-sang pledged. “Because this is a rehabilitation based on mergers and acquisitions, we will aim for rapid M&A. I will attempt to normalise management quickly, stabilise employment, and promote reemployment opportunities.” He added: “There are two companies that have actively shown their intention to take over, and four or five others that have signalled an interest.”