The court has extended the deadline for its decision on whether to open rehabilitation proceedings for JTBC to the 30th of next month.
The Seoul Bankruptcy Court's Rehabilitation Division 2 (presiding judge Chung Jun-young, chief judge) said on the 29th that it had extended the delay period, originally set to run through the 30th of this month, to the 30th of next month in order to support consultations on restructuring between JTBC and its creditors. The court explained that "it is necessary to extend the decision on whether to open rehabilitation proceedings in order to support consultations on restructuring between the creditors and the debtor."
When JTBC filed for the commencement of rehabilitation proceedings with the court on the 15th of last month, it expressed a desire to pursue the Autonomous Restructuring Support (ARS) procedure. The court accepted this. The ARS program is a system that puts the opening of rehabilitation proceedings on hold for a period and supports companies and creditors in autonomously negotiating repayment plans. The key is to minimize damage to corporate value by having the company take the lead in pursuing normalization, rather than a court-led rehabilitation process.
When the court approves an ARS application, it can delay the decision on whether to open rehabilitation proceedings for up to three months. If there is substantial progress in negotiations, a further extension of the deadline is also possible.
If an agreement is reached within the delay period for the rehabilitation decision, JTBC will withdraw its rehabilitation application and implement its planned ARS measures. If the consultations break down, the court will decide whether to open rehabilitation proceedings. With this decision, the court will judge whether to open rehabilitation proceedings after observing the results of the autonomous restructuring consultations between JTBC and its creditors.
Aside from JTBC, four JoongAng Group affiliates that filed for rehabilitation — JoongAng Holdings, Contentree JoongAng, JoongAng P&I, and Megabox JoongAng — have already had their rehabilitation proceedings opened. These companies have been notified of deadlines for submitting creditor lists and rehabilitation plans. The deadlines for submitting each company's rehabilitation plan are December 1 for Megabox JoongAng, December 15 for Contentree JoongAng, and December 22 for JoongAng Holdings and JoongAng P&I.
The JoongAng Group's financial crisis arose when JTBC declared a default on the 12th of last month after failing to repay a total of 20.6 billion won in securitization borrowings at maturity. Two days later, on the 14th, JoongAng Holdings, Contentree JoongAng, JoongAng P&I, and Megabox JoongAng filed for the commencement of rehabilitation proceedings, followed on the 15th by JTBC, the epicenter of the crisis.
