This article was displayed on the ChosunBiz MoneyMove (MM) site at 5:40 p.m. on Mar. 18, 2026.
As JoongAng Group decided to borrow 300 billion won from global credit manager Ares Management to resolve its financial crisis, the two sides are struggling in the final stretch of talks, unable to bridge differences over specific terms.
Ares is said to be asking JoongAng Group not to use the entire 300 billion won immediately and to leave part of it unused. JoongAng Group aims to sign a definitive agreement (SPA) within this month, as it needs to wrap up the funding from Ares quickly to repay convertible bonds (CBs) coming due soon and to pursue additional financing.
◇ Ares: "Put up more collateral and don't use all 300 billion"
According to investment banking (IB) industry sources on the 18th, Contentree JoongAng has been in talks with Ares since September last year to raise 300 billion won. While both sides signed a term sheet (basic terms of the investment contract), they have reportedly struggled to find common ground as Ares kept adding conditions. The original goal was to complete the funding by the end of December last year.
The new conditions presented by Ares reportedly require providing additional collateral and retaining part of the 300 billion won investment as a contingency rather than spending it down.
Such conditions are not very unusual in the private credit market. From a lender's standpoint, there are many cases of strengthening collateral or requiring the borrower to maintain a certain level of cash as emergency funds to reduce potential losses.
Ares is one of the world's largest private credit asset managers. Its assets under management (AUM) are close to $623 billion (about 930 trillion won).
The investment in Contentree JoongAng will also take the form of private credit. Basically, Ares lends money and receives interest, but it is also expected to secure a small number of warrants (the right to purchase shares under set conditions) to allow additional revenue if the company's value rises. This adds a mechanism to capture part of the upside while providing a loan, which the industry calls an equity kicker.
The interest is said to be around 15% annually. The maturity is two years with an extension option. Equity in subsidiaries such as Megabox JoongAng and SLL JoongAng will be provided as collateral.
Contentree JoongAng plans to use the 300 billion won from Ares to repay existing financial investors (FI). In 2021, Contentree JoongAng received about 100 billion won in the form of convertible bonds (CBs) from domestic private equity firm JKL Partners, which mature on Apr. 30. Including interest, 118 billion won must be repaid.
JoongAng Group is also said to be planning to repay Praxis Capital Partners' investment in SLL JoongAng, in addition to JKL Partners' CB investment. Praxis participated in SLL JoongAng's pre-IPO in 2021, investing about 300 billion won. JoongAng Group reportedly plans to repay 130 billion won first and pay 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 funding.
◇ Buyer search for Phoenix JoongAng likely to resume
JoongAng Group is reportedly hoping to conclude negotiations with Ares by the end of this month. The mere fact that "300 billion won was raised from a global investment firm" could make it easier for JoongAng Group to secure additional funding.
An IB industry official said, "Since the Homeplus Co. incident, sentiment toward non-investment-grade bonds has deteriorated, making it harder than before for JoongAng Group to sell corporate bonds," and added, "If it secures hundreds of billions of won from Ares this time, it could be seen as a positive signal by market participants." Contentree JoongAng's unsecured bond credit rating was downgraded to BBB- at the end of last year.
JoongAng Group is expected to seek a new buyer for Phoenix JoongAng and resume negotiations as soon as the funding from Ares is finalized. The market believes that JoongAng Group's financial crisis can be resolved only after the sale of Phoenix JoongAng and the merger 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 late last year to sell Phoenix JoongAng and planned to receive the acquisition payment by the end of January this year, but talks were delayed and are now effectively broken down. JoongAng Group is said to be seeking a total corporate value for Phoenix JoongAng (based on equity value) of about 250 billion won.