Midsize Property Developer Gets Nod to Buy Eastar Jet

Midsize property developer Sungjung has been chosen as the preferred bidder to acquire cash-strapped budget carrier Eastar Jet, the airline said Tuesday.

A consortium led by underwear maker Ssangbangwool was selected as the follow-up bidder.

Sungjung offered W110 billion and will now spend about a week conducting due diligence before signing the deal (US$1=W1,135). Around W70 billion of that money will be used to pay back wages and severance pay to Eastar Jet staff and the rest to pay back creditors.

Industry watchers believe Sungjung will have to spend much more to get the ailing carrier back on its feet and wonder if it has the money. A new air operator's license alone would cost around W150 billion.