According to the Financial Supervisory Service’s electronic disclosure system on the 15th, Contentre Central and its subsidiary Megabox Central filed an application with the Seoul Bankruptcy Court on the 14th to initiate rehabilitation proceedings, seek provisional measures, and obtain a comprehensive injunction. Megabox Joongang is a key subsidiary accounting for 35.76% (890.7 billion won) of Contentree Joongang’s consolidated total assets (2.4909 trillion won). It is also reported that the holding company, Joongang Holdings, and Joongang P&I have filed for rehabilitation proceedings.
It is interpreted that, despite having first played the asset securitization card, the company was unable to meet the maturity dates of short-term securitized bonds, leading to a hasty shift toward court receivership. With the recovery of the theater industry delayed and the burden of content investments mounting, the group’s credit lines across the entire affiliate network dried up, prompting the decision to seek management normalization under the court’s legal protection.
JoongAng Group’s liquidity crisis first emerged last month. In response, the group moved to prioritize the sale of office buildings worth a total of 550 billion won—including the JoongAng Ilbo Building and JTBC Building in Mapo-gu, Seoul, and the Ilsan Studio in Goyang, Gyeonggi Province—and selected Koramco Asset Trust as the preferred bidder, signing a memorandum of understanding (MOU).
However, as the originally targeted completion date for the final transaction was set for the end of August, a short-term liquidity crisis resurfaced. This was because the process required at least several months for due diligence and negotiations on detailed terms, leaving the company short of cash to cover short-term debts, such as JTBC’s securitized bonds maturing in mid-June.
Previously, on the 12th, JTBC declared a default after failing to repay a total of 20.6 billion won in securitized debt upon maturity. Amid ongoing performance deterioration due to the structural slump in the broadcast advertising market and the shift to new media, the failure to refinance the maturing securitized assets proved decisive.
Domestic credit rating agencies simultaneously downgraded the credit ratings of JTBC’s major affiliates immediately following the default. NICE Credit Rating downgraded JTBC’s long-term credit rating from BBB (negative) to CCC and its short-term rating from A3 to C. JoongAng Ilbo’s long-term credit rating was also downgraded from BBB (negative) to BB-, and the short-term rating of its printing and distribution affiliate, JoongAng Ilbo M&P, fell from A3 to B-.
According to the credit rating industry, the group’s total debt, combining JoongAng Holdings, JTBC, and Contentsree JoongAng, amounts to approximately 2.8 trillion won. Due to an excessive debt burden relative to current cash generation and uncertainty regarding funding, the risk of refinancing other securitized loans and corporate bonds has also become extremely high.
