Underwear maker vs. construction company for Korean Eastar Jet
The only company remaining to participate in the preliminary tender for Eastar Jet (ESR, Seoul Gimpo) is a consortium led by underwear specialist Ssang Bang Wool, following the withdrawal of the favorite breeding company and Harim Group logistics, Yonhap news agency reported in June. 14.
Ssang Bang Wool, who is bidding for the low-budget transporter in debt through its subsidiary Kanglim, a manufacturer of heavy-duty vehicles and cranes, now has to compete in a two-horse race with a local construction company who was previously selected as the preferred bidder, sources told the news agency.
Little-known company SJ Industrial Co., a “mid-size” company that Eastar Jet chose to be its anonymous “stalker” investor in May. He has already submitted his bid price, under which other bidders cannot submit a price.
SJ Industrial, based in Busan, owns the Baekje Country Club, a golf course in Buyeo, about 140 kilometers south of Seoul, and Daeguk Construction, a small demolition and demolition company based in Hampyeong, in the southeast. from Korea. It is not clear what the motivations of SJ or Ssang Bang Wool might be to buy an insolvent, non-AOC airline.
The sources said that SJ Industrial cannot compete with Ssangbang Wool Group in terms of financial strength. The country club and Daeguk Construction’s annual sales are approximately 30 billion won ($ 26.8 million) and 14 billion KRW ($ 12.5 million), respectively. SsangBang is said to have made a preliminary offer of approximately KRW 100 billion (USD 89.5 million).
The winner will also have to assume the debts of Eastar Jet, which the sources say include KRW 70 billion ($ 62.6 million) in unpaid wages and severance pay and debts of around KRW 185 billion. ($ 165.5 million). The Harim Group’s maritime subsidiary, Pan Ocean, and a number of private equity funds that had previously expressed interest in the carrier failed to submit bids on time, the sources said.
Eastar will now review bidders’ offers and post-acquisition financing and business plans to select a final preferred suitor on June 21. The Preferred Bidder will then spend approximately ten days doing a due diligence on Eastar Jet before signing an agreement to purchase it. in July. Currently in a court-led corporate restructuring process, Eastar Jet is due to submit its own debt repayment and other rehabilitation plans to the court by July 20.