S Korea’s Jeju Air says it may scrap plan to take over budget carrier peer Eastar Jet

A Jeju Air flight about to take off. Photo: Jeju Air

South Korea’s top budget carrier Jeju Air Co Ltd said it may walk away from a deal agreed in principle to take over smaller Korean peer Eastar Jet, a Jeju Air official said on Thursday, as air travel slumps amid the coronavirus outbreak.

Jeju Air agreed in March to acquire 51% of Eastar Jet for 54.5 billion won ($45.40 million), a price lower than a preliminary deal to pay about 69.5 billion won that Jeju Air reported in a regulatory filing in December.

“We will consider abandoning the deal” within 10 business days, the Jeju Air official said, citing difficulties in ongoing talks over undisclosed preconditions.

Eastar Jet was not immediately available for comment.

Shares of Jeju Air closed up 6.9%, compared with a 1.4% rise in the wider KOSPI.

Analysts said it might be very difficult to save the deal from collapse as South Korean carriers, hit by low travel demand due to travel restrictions stemming from the coronavirus pandemic, as well as a diplomatic feud between South Korea and Japan last year.

Jeju Air‘s management should conclude whether the takeover plan of Eastar Jet is still prudent to pursue given the crisis the aviation industry is facing,” said Um Kyung-a, an analyst at Shinyoung Securities.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.