Court Approves 'Fly Gangwon' Rehabilitation Plan... Winix Acquisition Planned

The court approved the rehabilitation plan of the low-cost carrier (LCC) 'Fly Gangwon.'

The Seoul Rehabilitation Court, Rehabilitation Division 14 (Chief Judge Lee Yeo-jin), held a creditors' meeting on the 23rd and decided to approve Fly Gangwon's rehabilitation plan. The approval conditions were met with the consent of more than three-quarters of the secured rehabilitation creditors and more than two-thirds of the rehabilitation creditors.

Established in 2016, Fly Gangwon suspended operations in May last year due to worsening business conditions caused by the spread of COVID-19. The major shareholder, Ayum, applied to the Seoul Rehabilitation Court for the commencement of rehabilitation proceedings, which began in June. As of the commencement decision date, Fly Gangwon's assets and liabilities were assessed at 15.5 billion KRW and 64.6 billion KRW, respectively.

The court aimed for rehabilitation through mergers and acquisitions (M&A) and pursued M&A twice before the approval of the rehabilitation plan until January this year, but failed to find a suitable bidder.

Accordingly, in March this year, the court initiated a consultation process with the creditors' committee regarding the termination of the rehabilitation proceedings. If there were no objections, the rehabilitation proceedings would be terminated, allowing creditors to proceed with compulsory execution.

However, following Fly Gangwon's appeal, the court extended the submission period for the rehabilitation plan until early May, and Fly Gangwon dramatically entered into an M&A with the home appliance company Winix. Eventually, Winix was confirmed as the final prospective acquirer and submitted a rehabilitation plan using the acquisition funds as repayment resources.