JoongAng Ilbo begins workout, plans sale of management rights

JoongAng Ilbo, a South Korean media company, has officially entered corporate restructuring proceedings, commonly known as a workout, following a liquidity crisis. The decision comes three weeks after the company's commercial paper defaulted on June 19, triggering the workout application.

The newspaper group is now obligated to implement a comprehensive restructuring plan. This plan, submitted to its creditors, includes the sale of the controlling shareholder's stake and other company assets. The primary creditor bank, Hana Bank, along with other financial creditors, convened a meeting on July 10 and agreed via written resolution to commence the workout. This approval met the requirement of over 75% of creditors agreeing, as stipulated by the Act on Facilitation of Corporate Restructuring.

As part of the workout, creditors have agreed to a three-month moratorium on debt collection. During this period, an external assessment, involving accounting firms and other professional bodies, will be conducted. This assessment will evaluate JoongAng Ilbo's precise asset value, the extent of its liabilities, and its overall potential for rehabilitation as a business. According to the company's audit report from late March, its total debt stood at 486.9 billion won.