Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
JoongAng Ilbo files for creditor-led workout program
People grab a JoongAng Ilbo special issue covering the National Assembly's approval of former President Yoon Suk Yeol's impeachment motion in Yeouido, Seoul, Dec. 14, 2024. Courtesy of JoongAng Ilbo
By Nam Hyun-woo
JoongAng Ilbo, one of Korea's leading newspapers, has filed for a creditor-led workout program, as the liquidity crisis at its parent JoongAng Group deepens to threaten the group's affiliates, including major broadcaster JTBC.
According to the newspaper on Friday, it filed for a workout program with its main creditor Hana Bank, in a bid to restructure its debt and improve its financial health through negotiations with creditors.
"We will continue discussions with creditors and faithfully devise effective debt restructuring measures and plans to normalize management," the newspaper said in a press release.
Earlier this week, five JoongAng Group subsidiaries — JoongAng Holdings, JTBC, Contentree JoongAng, Megabox JoongAng and JoongAng P&I — filed for court receivership after JTBC defaulted on a 20.6 billion won ($13.6 million) debt repayment.
The groupwide financial crisis also affected JoongAng Ilbo. On Thursday, Hanyang Securities, which holds 22 billion won worth of commercial paper issued by the newspaper, demanded early repayment of the short-term debt, citing heightened credit risks across JoongAng Group and the subsequent downgrade of JoongAng Ilbo's credit rating.
JoongAng Group Vice Chairman Hong Jeong-do bows during a press conference over a liquidity crisis affecting its subsidiaries and affiliates at the group's headquarters in Mapo District, Seoul, Monday. Yonhap
The newspaper said in a regulatory filing Friday that it had confirmed a first bill default as of Thursday after failing to settle payment obligations due to insufficient deposits.
In the press release which came hours later, JoongAng Ilbo explained that "debt restructuring should be carried out in a fair and consistent manner for all creditors," adding that "it would be difficult to accept only certain creditors' demands for early repayment."
Investors of JoongAng Group companies also held a press conference on Friday, saying the group “should not pass on the responsibility of its management failures to individual investors” and “full repayment of principal for individual creditors should be the top priority.”
They also called on JoongAng Group's owner family to contribute their private assets to protect individual investors' principal, while demanding the resignation of the group's leadership.
Central to the group's financial troubles are costly deals for exclusive broadcasting rights to major sporting events.
The group paid a combined $500 million — approximately 700 billion won at the time — for rights to broadcast the Olympics from 2026 through 2032 and the FIFA World Cup through 2030 on JTBC. It then sought to recoup those costs by sublicensing them to Korea's three major terrestrial broadcasters — KBS, MBC and SBS — which later pulled out of negotiations over the sublicensing fees. KBS later rejoined the deal and is currently broadcasting the events, despite expected losses.