▲ Hong Jeong-do, Vice Chairman of JoongAng Group, reads an apology during a press conference held at the JoongAng Ilbo building in Mapo-gu, Seoul, on the 15th regarding the commencement of rehabilitation procedures for some JoongAng Group affiliates, including JTBC, due to a liquidity crisis.
As the holding company of JoongAng Group and five of its affiliates have entered domino rehabilitation procedures, JoongAng Ilbo announced that it has triggered an Event of Default (EOD) on corporate bonds totaling 137 billion won due to the fallout.
According to the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART) today (June 17), JoongAng Ilbo disclosed on the 16th that an EOD event has occurred for four types of corporate bonds: the 43-2 series (18 billion won), 46th series (34 billion won), 47th series (35 billion won), and 51st series (50 billion won).
An Event of Default (EOD) refers to a situation where a creditor recalls a loan before its maturity date due to an increase in the debtor's credit risk.
When JoongAng Ilbo signed the underwriting agreement for its 49th series of bearer non-guaranteed private bonds in February, it included a clause stating that the benefit of time would be lost if the corporate credit rating assigned by Korea Investors Service and Korea Ratings fell by one notch or more compared to the previous rating.
This clause was triggered as JoongAng Ilbo's credit rating was downgraded following the recent default of JTBC, which amounted to 20.6 billion won.
With the obligation for early repayment of the 49th private bond triggered, the remaining four bonds also became subject to repayment under the clause stating that the benefit of time is lost if it is lost for bonds other than the subject bonds.
In principle, when an EOD occurs, the entire principal and interest of the corporate bonds must be repaid immediately.
JoongAng Ilbo, which is currently pursuing a workout (corporate financial structure improvement program), is expected to negotiate for maturity extensions.
JoongAng Group saw its holding company, JoongAng Holdings, along with Contentree JoongAng, JoongAng P&I, and Megabox JoongAng, file for rehabilitation procedures after JTBC failed to repay a total of 20.6 billion won in debt on the 12th; JTBC also filed for rehabilitation the following day.
Previously, on the 14th, JTBC filed an application with the court to postpone the commencement of rehabilitation procedures and expressed its intention to participate in the Autonomous Restructuring Support (ARS) program.
※ Please note: This article was translated by AI and may contain errors.