[Edaily Marketin, Reporter Song Seung-Hyeon ] JoongAng Ilbo, which is currently undergoing a financial restructuring program, will welcome a consortium consisting of Daewoo Kiwoom, CJ, and Shinsegae as its new owner. Daewoo Kiwoom Group and CJ Group will take charge of joint management, while Shinsegae will participate as a financial investor (FI). With the deal entering the final agreement stage just two months after the sale announcement in September, efforts to normalize JoongAng Ilbo’s operations are expected to gain momentum.

According to investment banking (IB) industry sources on the 4th, JoongAng Ilbo and the Daewoo Kiwoom, CJ, and Shinsegae consortium are scheduled to sign a Share Subscription Agreement (SSA) on the 5th. Both sides have concluded negotiations on key issues, and it is reported that the consortium members plan to disclose the terms of the agreement following board resolutions.

The transaction will take the form of a third-party private placement. The consortium will invest approximately 500 billion won to acquire newly issued shares from JoongAng Ilbo. Unlike a sale of existing shares, the proceeds will go directly to the company and be used to repay debt and improve its financial structure. As of the end of the first half of this year, JoongAng Ilbo’s debt stood at approximately 430 billion won; industry observers view this amount as sufficient not only to repay the debt but also to cover working capital needs.

Following the signing of the agreement, the next steps will include approval from the Financial Creditors’ Council led by Hana Bank, the lead creditor bank; filing a business combination notification with the Fair Trade Commission; and the payment process for the rights offering. The Creditors’ Council will hold a meeting on the 6th to discuss the acquirer, the acquisition method, and the debt repayment ratio. Both sides aim to close the transaction by the end of the year, and the creditor group also has its sights set on exiting the workout program by year-end.

The original target date for the agreement was the 30th of last month, but the schedule was pushed back as negotiations dragged on over the issue of the JoongAng Ilbo’s publication title and the internal equity distribution within the consortium. It is reported that Daewoo Kiwoom Group and CJ Group engaged in a tug-of-war over management control until the very last moment before settling on a joint management structure.

The JoongAng Ilbo entered a workout program last July amid the group’s liquidity crisis and proceeded with the sale of management control under the leadership of Hana Bank. Samil PwC served as the lead advisor for the sale. Initially, a plan to sell existing shares held by the largest shareholder, JoongAng Holdings, and others was considered; however, since JoongAng Holdings is undergoing rehabilitation proceedings—which requires court approval for the disposal of shares—the plan shifted to issuing new shares.

In the preliminary bidding, which closed on September 21, six companies—Daewoo Technology, Orion, Global Sea, OK Financial Group, E-Broadcasting, and Geumbo Development—submitted letters of intent (LOIs). CJ Group, which had been considered a leading prospective buyer, did not participate in the preliminary bidding but formed a consortium with Daewoo Kiwoom on the 16th of last month, three days before the final bidding. Since only companies that participated in the preliminary bidding were eligible for the final round, CJ paved the way by partnering with Daou Kiwoom, which was already on the shortlist. CJ is the third-largest shareholder of JoongAng Ilbo, holding a 9.24% stake through CJ Olive Networks.

On the 19th of last month—the day of the main bidding—Samil PwC selected the Daoukium-CJ consortium as the preferred bidder. It was reported that, in addition to price, the evaluation took into account the consortium’s media business management capabilities and financial soundness. Shinsegae officially announced its joining of the consortium the following day, on the 20th. The fact that, under the Newspaper Act, business groups subject to cross-shareholding restrictions cannot hold more than 50% of a daily newspaper’s shares is cited as the reason behind the alliance of these three groups.

As the sale of JoongAng Ilbo enters its final stages, the restructuring of the JoongAng Group is expected to accelerate. JTBC, which is currently undergoing rehabilitation proceedings, has selected EY Han Young as its lead advisor for the sale and plans to issue a sale notice on the 9th; companies such as Phoenix JoongAng and SLL JoongAng are also proceeding with their own divestitures.