KB News Desk
JoongAng Ilbo Co., a major South Korean newspaper publisher, has won approval for a creditor-led debt workout program, industry sources said Friday.
Main creditor Hana Bank and other lenders reached the decision after consultations.
On June 19, JoongAng Ilbo applied for the debt workout program amid liquidity problems at its parent, JoongAng Group.
The application came after the company failed to meet a request for an early repayment of 22 billion won (US$14.38 million) worth of commercial paper.
Under the decision, creditors’ debt collection efforts will be suspended for three months, allowing the company to avoid court-led rehabilitation proceedings.
JoongAng Ilbo will draw up a business normalization plan based on a due diligence review by an accounting firm. The plan will be implemented after obtaining approval from the creditors, according to the sources.
The company’s self-rescue plans include drastic cost-cutting efforts, measures to generate stable cash flow, asset sales and the sale of the controlling shareholder’s stake.
JoongAng Ilbo has said it will hold talks with potential buyers on the sale of its management rights.
JoongAng Holdings owns a 64.7 percent stake in JoongAng Ilbo and is controlled by the founding family of JoongAng Group.
Meanwhile, five other JoongAng Group affiliates, including broadcaster JTBC and holding company JoongAng Holdings, filed for court-led rehabilitation proceedings last month.
