Hanyang Securities said most of its exposure related to JoongAng Ilbo and JTBC can be recovered within the year. As investor concerns grew after affiliates of JoongAng Group began rehabilitation proceedings recently, the company moved to quell worries by disclosing its asset recovery plan and current financial soundness.
Hanyang Securities said in a news release on the 17th that "recovery of 84 billion won in exposure related to JoongAng Ilbo and JTBC is proceeding as planned," and "financial soundness is also being maintained stably."
According to the company, part of the funds have already been repaid this month, and about 16 billion won is expected to be recovered additionally by the end of the month. Cumulative recovery is seen at 44.6 billion won by the end of September and 73.1 billion won by year-end. That represents about 87% of total exposure. The company also expects the remaining amount can be recovered by February next year.
Hanyang Securities said it is managing the asset based on collateral rights. In particular, it is using a structure of accounts receivable collateral trust, and its position is that funds can be recovered through cash flows generated from the related accounts receivable regardless of whether rehabilitation proceedings or workouts proceed at JoongAng Ilbo and JTBC.
The explanation is seen as a response to rising investor concerns over a recent liquidity issue at JoongAng Group affiliates. Earlier, NICE Investors Service assessed in a report analyzing financial companies' exposure to JoongAng Group affiliates that Hanyang Securities' related exposure was relatively large. Shares of Hanyang Securities fell more than 11% on the day.
Hanyang Securities maintains that, based on secured collateral and cash flows, there is no problem with asset recovery.
A Hanyang Securities official said, "We will continue thorough management of the related asset and maintain transparent communication to bolster trust with the market and shareholders."