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February, 24, 2017

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Takeover could go through before Jan. 11

TAIPEI, Taiwan -- If everything goes smoothly, Far Eastern Air Transport's (FAT, 遠東航空) potential takeover of TransAsia Airways (復興航空) could be completed before TransAsia's extraordinary general meeting scheduled for Jan. 11.

FAT told The China Post on Tuesday that the deal requires approval from TransAsia's creditor banks and the court.

FAT has recruited some of TransAsia's former staff, primarily mid-level managers, and has reached out to TransAsia's creditor banks to discuss the airline's takeover, said Huang Yu-chi (黃育祺), the office manager for FAT Chairman Fenno Chang (張綱維).

Chang broke the news of the takeover plan during a recent interview with The China Post.

Once the court approves a restructuring plan submitted collectively by the banks, FAT will be able to take over the airline without going through an EGM slated for Jan. 11 of next year, Huang said.

Huang confirmed that more than 100 mid-level managers and 40 to 50 workers from TransAsia Airways had been recruited by FAT and would be employed by the airline before the Chinese New Year holiday in January.

The airline had been interviewing applicants from TransAsia since last Saturday, he said.

Huang reiterated that FAT was purchased and restructured by Chang three years ago, after it suspended operations.

"So we are seasoned in restructuring a company," Huang said.

Employees' wellbeing is the company's current top priority," Huang quoted Chang as saying, elaborating that FAT intended to help laid off employees to "enjoy a joyful Chinese New Year."

When it came to aviation rights, Huang said FAT was "prepared to compete with other airlines interested in taking over cross-strait flight routes."

For international routes, such as those between Taipei and Sendai, Japan, and Taipei and Chiang Mai, Thailand, FAT can apply for flying permission with local aviation institutions and will not need to compete for aviation rights with domestic airlines, Huang said.

The Civil Aeronautics Administration (CAA,民航局) declined to comment on FAT's potential takeover, saying it cannot support or disapprove such a plan, because "it is a business matter."

Mega International Commercial Bank (兆豐銀行), one of the main creditors, said on Tuesday that it was not aware of FAT's potential takeover.

Asked to comment on FAT's recent recruits, Deputy Director of TransAsia Airways Labor Union Pang Min-yi (龐閔憶) said FAT plans to pay TransAsia's staff much less than their original salaries and that she doubted FAT had the capital to take over the airline.

"As far as I've learned, FAT is seeking to buy our ATR aircraft and the company recruited former TransAsia staff because their current employees are not trained to operate and to work on ATR aircraft but ours are," she said.

She further accused FAT employees of seeking signatures for a petition letter at TransAsia's headquarters, which advocated for FAT's takeover of TransAsia.

"Members of the union knew better than to sign the petition letter because their (FAT's) offer was so bad," she said.

More than 100 members of the labor union protested outside the Goldsun Group's (國產實業集團) building Tuesday morning, demanding that TransAsia Chairman Vincent Lin (林明昇) attend Wednesday's labor-management negotiation meeting to discuss the terms of severance packages. The Goldsun Group is owned by Lin's father Lin Siao-sin (林修信).

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