The rehabilitation of Watcha, Korea's first-generation online video service (OTT), is dragging on. With CJ ENM, a leading acquisition candidate, abandoning the deal and sending the sale back to square one, Watcha has again extended the deadline to submit its rehabilitation plan to find a new buyer.
According to legal sources on the 11th, Watcha the previous day applied to the Seoul Bankruptcy Court to extend the deadline for submitting its rehabilitation plan, and the court on the same day extended the deadline to July 16. Watcha has been under rehabilitation since Aug. 2025.
This is not the first time Watcha has extended the deadline for submitting its rehabilitation plan. From January to this month, it postponed the deadline six times in total. That is because it has been pursuing a pre-approval merger and acquisition (M&A) process to find a new investor by selling management control before finalizing the rehabilitation plan.
Previously, CJ ENM showed interest in acquiring Watcha and was cited as a leading bidder. However, by not participating in the main bidding held on April 22, the sale fell through. Watcha is reportedly pushing a resale to find a new buyer.
In the industry, Watcha's poor financial condition is cited as the reason CJ ENM's acquisition fell through. According to Watcha's 2024 consolidation audit report, accumulated deficits stand at 267 billion won, and total equity is minus (-) 87.5 billion won, indicating a state of complete capital impairment. It means accumulated losses have outgrown the company's capital.
A decline in users is also a burden. Watcha's monthly active users (MAU) reportedly fell from around 1.3 million in 2022 to around 300,000 this year. As competition among domestic and overseas OTT platforms has intensified, both its user base and revenue are seen to have deteriorated simultaneously.
The latest extension of the rehabilitation plan submission deadline is likewise a step tied to the resale push. A court official said, "They applied to extend the deadline on the grounds that a pre-approval M&A process is underway, and the bench accepted it."
If Watcha fails to find a new acquirer, the rehabilitation proceedings could be halted. If the court determines the prospects for rehabilitation are low, it can decide to discontinue the process. In that case, Watcha could move to bankruptcy proceedings, and the continuity of the services currently offered could become uncertain.
Watcha is a first-generation content streaming company in Korea. Founded in 2011, it began with a personalized movie recommendation service and launched its streaming service in 2016. It gained users by showing strength in movie ratings and recommendations, but faced difficulties as competition intensified after Netflix entered Korea. Its corporate value once exceeded 300 billion won, but it is now said to have fallen to around 10 billion won.