JoongAng Ilbo, facing a liquidity crisis, has initiated a corporate restructuring process (workout).
According to Yonhap News on July 10, the main creditor bank, Hana Bank, along with other financial creditors, held the first meeting and agreed in writing to commence the workout process for JoongAng Ilbo.
Under relevant laws, a workout can begin if creditors holding more than three-quarters of the total financial claims agree. During the meeting, approval exceeding 75% based on bond amounts was secured by 6 PM, confirming the workout.
As a result, the creditors' claims will be suspended for three months, allowing JoongAng Ilbo to avoid court-led corporate rehabilitation procedures.
JoongAng Ilbo plans to undergo an audit by an accounting firm and establish a management normalization plan, which will be implemented with creditor approval.
Previously, due to the management crisis at JoongAng Group, the company's credit rating declined, and liquidity issues worsened, prompting JoongAng Ilbo to apply for a workout on June 19.
In contrast to five affiliates of JoongAng Group, including JTBC, JoongAng Holdings, Contentree JoongAng, Megabox JoongAng, and JoongAng P&I, which filed for corporate rehabilitation, JoongAng Ilbo has pursued a workout, stating, "We will resolve temporary liquidity issues and improve our financial structure through discussions with creditors."
The self-rescue plan submitted by JoongAng Ilbo includes measures such as generating operating cash flow through stringent cost reductions, selling owned real estate, and divesting management rights.
Notably, JoongAng Ilbo has indicated plans to sell management rights held by the founding family, engaging in discussions with multiple potential buyers.
Currently, JoongAng Ilbo's largest shareholder is JoongAng Holdings, which holds a 64.7% stake. The shares are owned by the founding family, including Hong Jeong-do (55.8%), Hong Jeong-in (37.2%), and Hong Seok-hyun (7.0%).
* This article has been translated by AI.
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