Jeon Jin-bae, CEO of JTBC, heads to the courtroom to attend a rehabilitation representative hearing at the Seoul Bankruptcy Court in Seocho-gu on June 23, when court proceedings began for five Joongang Group affiliates that filed for court receivership. [Yonhap]
Jeon Jin-bae, CEO of JTBC, heads to the courtroom to attend a rehabilitation representative hearing at the Seoul Bankruptcy Court in Seocho-gu on June 23, when court proceedings began for five Joongang Group affiliates that filed for court receivership. [Yonhap]

A court has extended by one month the period during which it will defer a ruling on whether to open formal bankruptcy proceedings for JTBC.

The Seoul Bankruptcy Court's Second Rehabilitation Division, presided over by Chief Judge Jeong Jun-yeong with Judge Hong Jun-seo as the presiding judge, said Wednesday it had accepted JTBC's request to extend the deferral period for a decision on whether to commence rehabilitation proceedings. The deadline, originally set for Thursday, has been pushed back one month to Aug. 30.

The court said it found it necessary to extend the deferral "in order to support restructuring negotiations between creditors and the debtor."

Earlier, the court had accepted JTBC's application for the Autonomous Restructuring Support (ARS) program, under which it agreed to defer a decision on whether to open formal rehabilitation proceedings. The ARS regime allows a court to hold off on that decision for a set period while supporting the company in voluntarily negotiating debt restructuring with its creditors.

The program is designed to minimize damage to corporate value while pursuing normalization. Because formal rehabilitation proceedings have not been opened at this stage, the rights of creditors and shareholders remain intact.

In principle, the total ARS period may not exceed three months, though extensions beyond that are possible if negotiations show meaningful progress.

JTBC declared a default on June 12 after failing to repay 20.6 billion won ($14 million) in securitized borrowings at maturity. The court on June 30 approved the opening of formal rehabilitation proceedings for four affiliates — Megabox Joonggang, Joonggang P&I, Joonggang Holdings and ContentreeJoongAng. For JTBC itself, the court accepted the ARS program application instead.


notstrong@heraldcorp.com