JoongAng Ilbo Begins Workout Process... Plans for Real Estate and Management Control Divestment

Over 75% Creditor Approval Based on Claim Amount

Business Normalization Plan to Be Established Following Accounting Firm Due Diligence

JoongAng Ilbo is set to begin corporate restructuring proceedings (workout).

Yonhap News Agency

According to the financial sector on July 10, the main creditor bank, Hana Bank, and other financial creditors held their first meeting on this day and agreed to commence the JoongAng Ilbo workout process through a written resolution.

In accordance with relevant laws, a workout can be initiated when creditors holding more than three-quarters of the total financial claims agree. At the meeting, more than 75% of creditors, based on the amount of claims as of 6 p.m. that day, gave their consent.

As a result, the exercise of creditor rights has been suspended for three months. The company has also avoided entering court-led rehabilitation procedures.

Going forward, JoongAng Ilbo must establish a business normalization plan based on due diligence by an accounting firm. This plan will then be implemented after obtaining creditor approval and undergoing the necessary procedures.

Previously, JoongAng Ilbo faced a downgrade in its credit rating and a liquidity crisis due to the management crisis at JoongAng Group. In response, on June 19, the company applied for a workout with its main creditor, Hana Bank. This is different from the five JoongAng Group subsidiaries—JTBC, JoongAng Holdings, ContentreeJoongAng, Megabox JoongAng, and JoongAng P&I—which filed for court-led rehabilitation. JoongAng Ilbo stated, "We aim to resolve our temporary liquidity issues and improve our financial structure through discussions with creditors."

The self-rescue plan presented by JoongAng Ilbo to creditors includes continuous generation of operating cash flow through intensive cost reduction, sale of owned real estate, and divestment of management control stakes. Cost-cutting measures include a freeze on new hires, partial return of executive salaries, the retirement of some executives, and a reduction in newspaper circulation.

In particular, JoongAng Ilbo announced plans to transfer management control from the founding family to new owners through discussions with several potential acquirers. The largest shareholder of JoongAng Ilbo is JoongAng Holdings, which owns a 64.7% stake. The shares in JoongAng Holdings are held by members of the founding family: Hong Jeongdo, Vice Chairman of JoongAng Group (55.8%), Hong Jeongin, CEO of ContentreeJoongAng (37.2%), and Hong Seokhyun, Chairman of JoongAng Holdings (7.0%).

This content was produced with the assistance of AI translation services.