Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
Who will acquire troubled JoongAng Ilbo?
JoongAng Group Vice Chairman Hong Jeong-do bows during a press conference over a liquidity crisis at the group's headquarters in Seoul, June 15. Yonhap
By Lee Hyo-jin
JTBC corporate bond investors blame Shinhan Securities for issuance
With JoongAng Ilbo entering a workout following a liquidity crisis, attention is turning to who will acquire one of Korea's leading newspaper publishers, with construction firms emerging as likely buyers, industry officials said Monday.
As construction companies increasingly expand into the media sector to diversify their business portfolios and strengthen brand recognition, JoongAng Ilbo's decision to put management rights up for sale has fueled speculation that they may seek acquisition.
Among the names most frequently mentioned are Hoban Group and Booyoung Group, both of which already have media holdings.
Hoban is viewed as a potential purchaser as it acquired national daily Seoul Shinmun, technology newspaper Electronic Times and business news outlet EBN in 2021, though it later sold Electronic Times in 2023.
Booyoung has also emerged as a potential buyer.
The group owns regional newspapers Incheon Ilbo and Jeju-based Halla Ilbo through its affiliates, and holds a 5.5 percent minor stake in broadcaster TV Chosun.
"Construction companies have increasingly viewed acquisition of media outlets as a way to diversify their business portfolios and strengthen brand recognition among consumers. However, any potential acquisition is likely to take time, as the workout process has only just begun," a financial investment industry official said.
These developments follow creditors' approval on Friday of JoongAng Ilbo's request to begin a workout program.
A workout is a creditor-led debt restructuring process that allows a company to negotiate with lenders while retaining greater control over its restructuring than under court-supervised rehabilitation.
The decision came after JoongAng Ilbo, the flagship newspaper of JoongAng Group, applied for a workout with its lead creditor, Hana Bank, on June 19, after 22 billion won ($14.5 million) in commercial paper defaulted amid mounting financial strain across the group.
While JoongAng Ilbo opted for a workout, five other JoongAng Group affiliates, including broadcaster JTBC and holding company JoongAng Holdings, filed for court-led rehabilitation as the group's liquidity crisis deepened.
Lee Bok-hyun, head of the legal team representing JTBC bondholders and former governor of the Financial Supervisory Service, speaks during a press conference in Seoul, Monday. Korea Times photo by Shim Hyun-chul
Meanwhile, investors who purchased JTBC corporate bonds called on financial authorities to thoroughly investigate the issuance and sale of the debt securities.
At a press conference on Monday, lawyers representing the investors said they had submitted a complaint to the Financial Supervisory Service (FSS), urging the regulator to expand its inspection to brokerage firms and other financial institutions involved in underwriting, distributing and selling the securities.
The complaint covers 250 investors who collectively suffered losses totaling 32.5 billion won, according to the legal team.
"A key question is whether retail investors were adequately informed about the risks associated with the debt securities and the financial burden they could impose on the issuer," said Lee Bok-hyun, a former FSS governor who now heads the investors' legal team.
"Public disclosures already pointed to the company's deteriorating financial condition. We intend to hold the underwriters accountable for failing to recognize those risks and proceeding with the issuance," Lee added.
The FSS is said to be reviewing whether the two brokerages — Shinhan Securities and Kiwoom Securities — continued underwriting and selling the bonds despite signs of JTBC’s deteriorating financial condition.