The general programming channel JTBC received a court decision to begin rehabilitation proceedings on the 26th. It came 74 days after it applied to begin rehabilitation on June 15. JTBC said it would sell the company quickly to normalize management.
The 2nd Division of the Seoul Bankruptcy Court said it ended JTBC's autonomous restructuring support (ARS) process and decided to begin rehabilitation proceedings.
JTBC had sought the ARS process when it applied to begin rehabilitation. ARS is a system that supports the company and creditors in voluntarily discussing plans for debt adjustment and management normalization. The court accepted this and had withheld its decision on whether to begin rehabilitation.
On why it ended the ARS process, JTBC said, "After multiple rounds of talks, we determined that beginning rehabilitation would be more effective in terms of protecting creditor rights," adding, "Accordingly, we did not file for an additional ARS extension, and the start of rehabilitation was decided."
In deciding to open JTBC's rehabilitation, the court cited the contraction of the broadcast advertising market caused by the rapid growth of domestic and international OTT platforms and the digital ad market as the cause of the financial collapse. It also pointed to the large expenditure in a short period for Olympic broadcasting rights fees. The bench chose not to appoint a separate administrator and to maintain the current CEO system.
Under the court's decision, JTBC must submit a list of creditors by Oct. 8. Creditors must also file their claims by Nov. 6. The claim review period will run through Dec. 4. The creditors' council will be composed of the company's major creditors, and a chief restructuring officer (CRO) appointed upon the recommendation of the creditors' council and others will oversee the company's cash flow, among other matters. The deadline to submit the rehabilitation plan is Jan. 29 next year.
EY Hanyoung, as the examiner, will investigate the circumstances that led JTBC to rehabilitation proceedings and assess the value of its assets. It will also evaluate going-concern value and liquidation value.
On June 12, JTBC declared a default after failing to repay at maturity a total of 20.6 billion won in securitized borrowing fund. In the aftermath, on the 14th of the same month, JoongAng Holdings, Contentree JoongAng, JoongAng P&I, and Megabox JoongAng filed to begin rehabilitation, and the next day JTBC separately filed for rehabilitation. The JoongAng Ilbo received a decision to begin a corporate workout.
JTBC said, "We will do our utmost to faithfully proceed with the court-led rehabilitation process," adding, "In addition, management and all employees will make every effort to normalize management through a quick sale."