Eastar Jet's New Owner is Seongjeong Co., Ltd... Notification of Priority Acquisition Rights Exercise

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 the notification of layoffs to 605 Eastar Jet employees. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Dongwoo Lee] The new owner of Eastar Jet, which is undergoing corporate rehabilitation procedures, has been virtually designated as Seongjeong Co., Ltd.

According to industry sources on the 17th, Seongjeong, a golf course management and real estate rental company, sent an official letter to the sales agency at 9 a.m. on the same day expressing its intention to exercise the priority acquisition right for Eastar Jet.

While Ssangbangwool Group reportedly offered an acquisition amount in the 110 billion KRW range in the main bidding, Seongjeong is expected to acquire Eastar Jet by investing an additional approximately 10 billion KRW beyond the acquisition amount (about 100 billion KRW) proposed during the conditional investment contract.

Even if the amount is the same, if Seongjeong expresses its intention to exercise the purchase right, the Seoul Bankruptcy Court will confirm Seongjeong as the final acquirer of Eastar Jet. The acquisition could be canceled if there are disqualifications such as funding issues, but since Seongjeong accepted the amount and conditions proposed by Ssangbangwool Group, the acquisition of Eastar Jet has been virtually finalized.

Seongjeong is known to have had a strong interest in airlines, to the extent that it considered investment in the airline before Eastar Jet was founded in 2006. Headquartered in Buyeo, Chungcheong Province, Seongjeong is engaged in golf course management, real estate rental, and real estate development, and expects the airline business to create synergy with its existing operations.

As of last year, Seongjeong recorded sales of about 6 billion KRW, and its affiliated golf course Baekje Country Club and civil engineering company Daeguk Construction Industry posted revenues of 17.8 billion KRW and 14.6 billion KRW respectively during the same period.

Some in the industry speculate that Seongjeong's scale is not large, making it difficult to raise additional investment funds, but it is reported that Seongjeong is currently securing funds based on the capital strength of the owner family.