Jeju Air Extends Eastar Jet Acquisition Deadline

Jeju Air has extended the deadline to acquire rival budget carrier Eastar Jet.

Jeju Air said in a statement on Thursday that Eastar Holdings, which owns Eastar Jet, "failed to complete preconditions for the stock sale contract by midnight Wednesday, making it possible to cancel the deal."

But it decided to extend the deadline in light of the fact that the government is mediating between the two sides to achieve a successful deal.

Jeju Air had told Eastar Jet to settle its outstanding lease payments and back wages of between W80-100 billion by July 23 or face a cancellation of the deal (US$1=W1,205).

Jeju Air apparently did not want to be seen to be responsible for the loss of some 1,600 jobs at Eastar Jet and leave creditors saddled with soured loans if it called off the sale.

Land, Infrastructure and Transport Minister Kim Hyun-mee met recently with Aekyung Group vice chairman Chae Hyung-seok and asked him to complete the acquisition. Aekyung is the parent company of Jeju Air.