This article was displayed on the MoneyMove (MM) site of ChosunBiz at 5:40 p.m. on Mar. 18, 2026.
As JoongAng Group decided to borrow 300 billion won at an annual 15% rate from global credit manager Ares Management to resolve its financial crisis, the two sides are struggling in the final stretch of talks as they fail to narrow differences over the specific terms.
Ares is said to be demanding that JoongAng Group not use the entire 300 billion won immediately and keep a portion in reserve. JoongAng Group aims to sign the main agreement (SPA) by the end of this month if possible, as it must quickly complete the fundraising from Ares to repay convertible bonds (CBs) coming due imminently and move on to additional financing.
◇ Ares: "Pledge more collateral and don't spend the entire 300 billion won"
According to the investment banking (IB) industry on the 18th, Contentree JoongAng has been negotiating with Ares since September last year to raise 300 billion won. The two sides signed a term sheet (basic terms of the investment contract), but they are reportedly struggling to find common ground as Ares keeps adding demands. The original goal was to complete the investment payment by the end of December last year.
The new conditions proposed by Ares reportedly call for additional collateral and for holding, without spending, a portion of the 300 billion won investment to prepare for contingencies.
Such terms are not very unusual in the private credit market. From the lender's standpoint, there are many cases where collateral is strengthened to reduce potential losses or where the borrower is required to maintain a certain level of cash as emergency funds.
Ares is one of the world's largest private credit asset managers. Its assets under management (AUM) approach $623 billion (about 930 trillion won).
This investment in Contentree JoongAng will also take the form of a private loan. Basically, Ares lends money and receives interest, but it is also said to be securing a small warrant (the right to purchase shares under set conditions) so additional revenue is possible if the company's value rises in the future. By attaching a mechanism that allows some gains from price increases even while providing a loan, the industry refers to this as an equity kicker.
The interest rate is said to be around 15% per year. The maturity is two years and is reportedly extendable. As collateral, equity stakes in subsidiaries such as Megabox JoongAng and SLL JoongAng will be provided.
Contentree JoongAng plans to use the 300 billion won from Ares to return investment funds to existing financial investors (FIs). In 2021, Contentree JoongAng received about 100 billion won from domestic private equity fund JKL Partners in the form of convertible bonds (CBs), which mature on Apr. 30. Including interest, 118 billion won must be repaid.
JoongAng Group is also expected to repay SLL JoongAng investment funds from Praxis Capital Partners, in addition to JKL Partners' CB investment. Praxis participated in SLL JoongAng's pre-IPO in 2021 and invested about 300 billion won. JoongAng Group is said to be repaying 130 billion won first and paying the remainder later. In addition, 50 billion won that J&PE injected into content producer Imaginus is also to be repaid by JoongAng Group through this fundraising.
◇ Phoenix JoongAng likely to seek new bidders again
JoongAng Group is reportedly hoping to conclude negotiations with Ares by the end of this month. That is because the mere fact that "it secured 300 billion won from a global investment firm" could make JoongAng Group's additional fundraising easier.
An IB industry official said, "After the Homeplus Co. incident, investor sentiment toward non-investment-grade bonds has deteriorated, making it harder than before for JoongAng Group to sell corporate bonds," adding, "If it receives hundreds of billions of won from Ares this time, it could be seen as a good signal by market participants." Contentree JoongAng's unsecured bond credit rating was lowered to BBB- at the end of last year.
Once this fundraising from Ares is completed, JoongAng Group is expected to resume negotiations by seeking a new bidder for Phoenix JoongAng. The market believes JoongAng Group's financial crisis can be resolved only when the sale of Phoenix JoongAng and the integration of Megabox JoongAng and Lotte Cinema are completed.
Phoenix JoongAng is a subsidiary of owner family company Jungang Resort Investment. Jungang Resort Investment holds 80% equity.
JoongAng Group had been negotiating with Hanwha Group since the end of last year to sell Phoenix JoongAng and planned to pay the acquisition price at the end of January this year, but the talks were delayed and are now effectively broken down. JoongAng Group is said to be seeking an overall corporate value (based on equity price) of about 250 billion won for Phoenix JoongAng.