Court Rules "Debtor Has Started Repayment... No Obstruction to Rehabilitation Plan Execution" Closure Decision
The court has decided to terminate the rehabilitation proceedings for Fly Gangwon (now Parata Airlines) early.
On the 18th, the Seoul Rehabilitation Court stated, "The debtor, Fly Gangwon, has started repayments according to the rehabilitation plan, and there are no other circumstances that would hinder the execution of the rehabilitation plan, so we have decided to conclude the rehabilitation proceedings."
Following Winix's acquisition of Fly Gangwon in July, the court judged that the approved rehabilitation plan is progressing smoothly as scheduled. According to the rehabilitation plan, Fly Gangwon agreed to repay approximately KRW 10.134 billion in cash for secured and rehabilitation claims, including the M&A payment. They have already repaid about KRW 8.178 billion of the target claims and have also settled most public claims such as wages and severance pay.
The court explained the reason for the early termination of the rehabilitation proceedings, stating, "The current rehabilitation process has resolved uncertainties, and it appears that all necessary permits and approvals for resuming flights (air operator certificate) are being smoothly processed." It added, "Since the acquirer is expected to actively engage in business activities, including continuous investment, immediately upon the conclusion of the rehabilitation proceedings, the termination is anticipated to greatly aid in restoring credibility and supporting business operations."
Established in April 2016, Fly Gangwon faced financial collapse due to a sharp decline in sales caused by the COVID-19 pandemic and lease companies' demands to suspend aircraft usage due to risk delinquencies, which halted its business operations. Consequently, Fly Gangwon filed for rehabilitation in May last year, and the rehabilitation proceedings commenced on June 16.
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