Companies cite 'business normalization and preservation of corporate value'; filings come two days after JTBC declared default

The JTBC headquarters in Sangam-dong, Mapo-gu, Seoul [Yonhap]
The JTBC headquarters in Sangam-dong, Mapo-gu, Seoul [Yonhap]

ContentreeJoongAng, an affiliate of the JoongAng Group, and its subsidiary Megabox JoongAng have filed for court receivership — two days after JTBC declared a debt default.

According to the Financial Supervisory Service's DART system, ContentreeJoongAng submitted applications to the Seoul Rehabilitation Court on June 14 for the commencement of rehabilitation proceedings, a preservation order and a comprehensive stay order.

The company cited "business normalization and preservation of value as a going concern" as the reason for the filing.

Trading in ContentreeJoongAng shares on the KOSPI Market was suspended that day following the receivership application.

Megabox JoongAng, a major subsidiary of ContentreeJoongAng, filed for rehabilitation proceedings on the same day.

Earlier, JTBC declared a default on June 12 after failing to repay 20.6 billion won (about $13.5 million) in securitized borrowings at maturity. The broadcaster attributed the situation to a rapid deterioration in the media environment — driven by the shift toward digital platforms and over-the-top streaming services — which has sharply contracted the television advertising market.

On the same day, NICE Credit Ratings downgraded JTBC's unsecured bond rating to CCC from BBB/Negative. Short-term ratings for commercial paper and electronic short-term bonds were also cut to C from A3.

The downgrades followed JTBC's failure to repay principal and interest on its securitized borrowings on time. The rating agency said liquidity risk had risen sharply after JTBC defaulted on a total of 20.6 billion won in securitized debt — comprising 5.6 billion won owed to Mir Second and 15 billion won to Jeil TVCJ Second.

Korea Ratings also cut its rating on JTBC to BB (Negative Review) from BBB (Negative), and lowered commercial paper and electronic short-term bond ratings to B (Negative Review) from A3. Credit ratings for JoongAng Ilbo and SLL JoongAng were also downgraded to BB+.

Korea Ratings said the risk of financial stress spreading across the group had grown, along with heightened liquidity uncertainty. "In a situation where the financial stability of the group as a whole has deteriorated, further credit deterioration at individual affiliates could amplify the refinancing risk on securitized instruments," it said.

In a statement, JTBC said it had "mobilized every available means to overcome the liquidity crisis" and pledged to "make every effort, exhausting all internal and external options."


balme@heraldcorp.com