Plan filed after nine deadline extensions since last year
Kinolights acquisition terms reflected; creditor meeting set for late this month
4.25 billion won acquisition price; single-digit bond repayment rate expected
Watcha, a domestic OTT platform undergoing court-led rehabilitation, has submitted its rehabilitation plan to the Seoul Bankruptcy Court. After extending the filing deadline nine times, the company has finally entered the creditor voting stage. The court will hold a creditors' meeting on Nov. 27 to deliberate and vote on the plan, marking a pivotal moment for Watcha's prospects of returning to normal operations.
According to IT industry and legal sources Monday, Watcha submitted its rehabilitation plan to the 17th division of the Seoul Bankruptcy Court on Oct. 14. The court is scheduled to hold the creditors' meeting on Nov. 27 to review and vote on the plan.
The submission comes roughly one year and two months after rehabilitation proceedings opened last August. During that period, Watcha extended the filing deadline nine times. The delays stemmed from setbacks in selecting an acquirer, as well as the time needed to negotiate repayment terms with individual creditors and work out how to handle existing shareholders' stakes.
Earlier this year, Watcha sought a new acquirer after a public sale fell through in April. In July, the company signed a conditional investment agreement with Kinolights, a content search and recommendation platform. A subsequent public sale to attract competing bidders drew no other offers, leaving Kinolights in effect as the sole acquisition candidate.
The acquisition price specified in the rehabilitation plan is approximately 4.25 billion won ($3.18 million), in line with figures previously reported in the market. That sum represents just over 1 percent of the company's valuation at its peak.
Watcha was valued at between 300 billion won and 330 billion won during a 2021 fundraising round that included the issuance of convertible bonds. The company had commanded a premium on the strength of the domestic OTT market's growth potential, but mounting competition from global streaming services and the burden of content investment costs pushed it into financial distress.
![[Screenshot from Watcha's website]](https://wimg.heraldcorp.com/news/cms/2026/11/02/news-p.v1.20250806.6e8aadce85d442ff9df1d46a900f8317_P1.jpg)
The central question at the upcoming creditors' meeting is whether creditors will accept the repayment terms laid out in the rehabilitation plan. Watcha's total debt far exceeds the acquisition price. The convertible bonds the company issued in 2021 alone amount to about 49 billion won. Even if the entire 4.25 billion won acquisition price were applied to repaying those bonds, it would cover only about 8.7 percent of the original principal.
According to industry sources, creditors' effective cash repayment rate is expected to land in the low single digits — between 1 and 5 percent. Debt that cannot be repaid in cash would be handled under the rehabilitation plan through partial forgiveness, debt-to-equity conversions or long-term installment repayments.
Industry attention is focused on how major convertible bond investors will vote at the creditors' meeting. For the rehabilitation plan to pass, it must secure approval from creditors holding at least two-thirds of total voting rights. Among the key convertible bond investors are Enlight Ventures, which invested about 20 billion won, and Dunamu, which invested about 10 billion won. Together, the two companies account for roughly 61 percent of the total 49 billion won in convertible bonds outstanding.
Industry observers view the creditors' meeting this month as a critical juncture that will determine whether Watcha survives.
If the rehabilitation plan is approved at the creditors' meeting and subsequently confirmed by the court, Watcha will proceed with debt restructuring and the Kinolights acquisition as outlined in the plan. Existing creditors' rights will also be adjusted in accordance with the repayment terms specified in the plan. The company would then pursue a return to normal operations through follow-on steps, including execution of the acquisition agreement and the transfer of equity stakes set out in the plan.
If the plan is rejected, additional negotiations, revisions or further voting procedures would be required. Should the legal conditions be met, the court could also force confirmation of the plan over the objections of certain dissenting creditor groups. If the plan ultimately fails to receive court confirmation and rehabilitation proceedings are terminated, the possibility of bankruptcy cannot be ruled out.
chami@heraldcorp.com
