JTBC enters debt restructuring support program; 4 Central Group firms begin rehabilitation

South Korean broadcaster JTBC and four other affiliates of the Central Group are proceeding with court-supervised financial restructuring. The Seoul Rehabilitation Court announced on May 30 that JTBC will enter an Autonomous Restructuring Support (ARS) program, a pre-rehabilitation process allowing for voluntary debt restructuring negotiations with creditors. A decision on JTBC's formal rehabilitation proceedings has been postponed until June 30.

In contrast, Central Holdings and three other Central Group companies, Central P&I, Contentree Central, and Megabox Central, will immediately commence formal rehabilitation procedures. These companies must submit creditor lists and participate in related procedures, aiming to present rehabilitation plans by December.

The ARS program for JTBC allows the court to suspend a decision on rehabilitation for up to three months, during which the company can continue normal operations. Successful negotiations within this period could lead to debt adjustments based on a self-help plan, potentially allowing JTBC to withdraw its rehabilitation application. Failure to reach an agreement will result in the company moving to formal rehabilitation proceedings.

No separate administrators will be appointed for the four companies entering immediate rehabilitation; their current CEOs will act as administrators. A creditors' committee will be formed to advise on debt and financial restructuring. The court has also initiated an assessment of each company's financial situation, ongoing business value, and liquidation value, appointing Hanyoung Accounting Corp. as the investigator for all five affiliates.

This situation follows JTBC's declaration of default on May 12 for failing to repay a 20.6 billion won (approximately $15 million) syndicated loan. Central Group affiliates subsequently filed for rehabilitation proceedings on May 14 and May 15.