Vice Chairman Hong Jung-do apologizes to creditors, shareholders

CEO Park Jang-hee: 'Independent entity from other affiliates'

JoongAng Group Vice Chairman Hong Jung-do bows in apology at a press conference held Monday at the JoongAng Ilbo Building in Mapo-gu, Seoul, where he addressed the court receivership filings by JTBC and other key affiliates of the group. [Yonhap]
JoongAng Group Vice Chairman Hong Jung-do bows in apology at a press conference held Monday at the JoongAng Ilbo Building in Mapo-gu, Seoul, where he addressed the court receivership filings by JTBC and other key affiliates of the group. [Yonhap]

JTBC and several other major media and content affiliates of JoongAng Group filed for court receivership Monday after failing to weather a liquidity crisis. Vice Chairman Hong Jung-do, the group's top executive, held an emergency press conference and bowed in a formal apology, saying he was "sorry for causing this trouble."

Hong held the press conference at the main auditorium of the JoongAng Ilbo Building in Mapo-gu, Seoul. "We did our utmost to stabilize management, but a combination of factors — including a deteriorating external economic environment, a credit rating downgrade and a resulting funding squeeze — made today's unavoidable choice impossible to avoid," he said.

JoongAng Holdings, the group's holding company, along with four core affiliates — JTBC, Contentree JoongAng, Megabox JoongAng and JoongAng P&I — completed their court receivership filings on Sunday and Monday. The move came three days after JTBC declared a default on Friday, when it failed to repay 20.6 billion won (about $13.5 million) in securitized borrowings at maturity. Years of mounting financial strain from a shrinking TV advertising market and a shifting media landscape had triggered a sharp credit rating collapse and a freeze in capital market access, delivering a direct blow to the group.

"I sincerely apologize again to the many creditors, shareholders and other stakeholders," Hong said. "Making your recovery our top priority is our foremost task, and we will do everything in our power to see it through." Appearing mindful of anxiety among staff, he added that the company would "make every effort to protect the job security of employees who must be deeply shaken," and stressed that "core operations — including coverage of the North and Central America World Cup — will continue without interruption."

Amid the filings, JoongAng Ilbo, the founding entity of the group, said it would pursue a workout — a creditor-led restructuring — rather than court receivership.

JoongAng Ilbo CEO Park Jang-hee said in a statement released Monday afternoon that the newspaper "feels a profound sense of responsibility for the current situation as the group's founding entity," and that it was pursuing a workout "to maintain continuity in content publication and fulfill its public duties as a news organization without interruption."

Park said JoongAng Ilbo is "a legally independent entity, operationally separate from the affiliates that have filed for court receivership," and described the workout as "a self-help effort to resolve a temporary liquidity problem through negotiations with creditors, improve the financial structure and proactively shield the company from affiliate risk." He added that "core journalistic activities — including print publication and digital reporting — will continue to be carried out faithfully and without change."


hwshin@heraldcorp.com