JTBC and several major affiliates of the Central Group have filed for bankruptcy protection amid a liquidity crisis. The situation escalated after JTBC failed to repay a 20.6 billion won ($15.5 million) liquidity loan, prompting concerns about the financial stability of Central Holdings, Contentree Central, and Megabox Central.
According to Yonhap News on June 15, the Seoul Bankruptcy Court has assigned the bankruptcy proceedings for Central Holdings, JTBC, Contentree Central, Megabox Central, and Central P&I to its second division. Although each company has a separate case number, they will be heard together by the same panel.
The court is expected to schedule hearings for the representatives of each company soon. Under the Debtor Rehabilitation Act, the court is required to question the debtors or their representatives upon receiving a bankruptcy application.
On June 12, JTBC declared default after failing to repay a 20.6 billion won liquidity loan. Factors contributing to the financial strain include a downturn in the broadcasting advertising market and shifts in the media landscape toward online video services.
Following JTBC's default, other Central Group affiliates also filed for bankruptcy protection. On June 14, Central Holdings, Contentree Central, Central P&I, and Megabox Central submitted their applications, with JTBC filing an additional request on the same day.
Industry analysts note that the combined pressures of weak advertising revenue and rising content production costs have structurally increased cash flow pressures on media groups that operate broadcasting, content, and theater businesses.
Central Holdings and Contentree Central have also requested provisional measures and comprehensive injunctions. Provisional measures prevent a company from disposing of assets to prioritize payments to specific creditors, while comprehensive injunctions freeze creditors' enforcement actions, such as seizures and auctions.
Credit rating agencies have begun adjusting their ratings. Korea Ratings downgraded JTBC's unsecured bonds, commercial paper, and short-term electronic bonds from C to D. NICE Investors Service also lowered JTBC's unsecured bond rating from CCC to D and its short-term credit rating from C to D. A D rating indicates a state of default where principal or interest payments are unable to be made.
Korea Ratings downgraded the commercial paper and short-term electronic bond ratings of Megabox Central and Contentree Central from B to C. SLL Central's rating was lowered from B to B-, and these companies have been placed on a watch list for further downgrades.
The credit rating of JoongAng Ilbo, the parent company of Central Group, has also been downgraded. Korea Ratings lowered JoongAng Ilbo's unsecured bond rating from BB+ to B- and placed it on a negative watch list. Korea Ratings also downgraded JoongAng Ilbo's unsecured bond rating from BB to B and included it on the watch list for potential downgrades.
* This article has been translated by AI.
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