A promotional image of Eastar Jet's aircraft (Eastar Jet)
Financially troubled Eastar Jet aims to select a new investor by early May as several investors have shown an interest in the budget carrier, the company's chief executive officer said Tuesday.
Eastar will decide whether to proceed with the investor selection process in the form of a "stalking-horse" bid or an open auction, by the end of this month, Eastar CEO Kim You-sang told Yonhap News Agency over the phone.
In the stalking-horse bid, Eastar will select a preliminary preferred bidder for the budget carrier ahead of an auction in which other bidders submit their prices. The stalking horse sets the low-end bidding price so that other bidders cannot underbid the price.
"Once the company has a potential investor and decides to proceed with the stalking-horse bid later this month, the Seoul Bankruptcy Court will be able to begin the bidding process to pick the investor early next month," Kim said.
The CEO said several companies have shown an interest in acquiring Eastar after the bankruptcy court approved the corporate rehabilitation process for the budget carrier in February.
Eastar plans to submit its debt-repayment and other rehabilitation plans to the court by May 20 and resume flights on domestic routes as early as June.
It also plans to receive an air operator certificate (AOC) from the transport ministry once the court accepts its own rehabilitation programs.
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.
Eastar has had difficulties in finding a strategic investor, or a company, since July of last year, when Jeju Air Co. scrapped its plan to acquire the carrier amid the prolonged COVID-19 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 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.
Deloitte Anjin LLC advises the deal as lead managers. (Yonhap)