▲ JoongAng Ilbo
JoongAng Ilbo has announced that it has been processed for an initial default after failing to meet a request for the early repayment of 22 billion won in commercial paper (CP).
According to the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART) on June 19, JoongAng Ilbo stated the previous day, "We have confirmed that we were processed for an initial default on June 18 as we were unable to settle the payment due to insufficient funds, despite the creditor's presentation of the bill for payment on the same day."
The defaulted commercial paper is held by Hanyang Securities. The original maturity dates were December 7 of this year (for 12 billion won) and March 30 of next year (for 10 billion won).
However, amid the recent liquidity crisis at JoongAng Group, an Event of Default (EOD) occurred, leading the creditor, Hanyang Securities, to initiate early collection.
An Event of Default is a contractual clause that allows a creditor to demand repayment before the maturity date if certain conditions, such as a credit rating downgrade, are met.
In a statement released the previous day regarding Hanyang Securities' early repayment request, JoongAng Ilbo said, "JoongAng Ilbo, which is currently pursuing a workout (corporate restructuring) with its main creditor bank, must maintain equity among all creditors," adding, "Therefore, it is difficult to provide early repayment to a specific creditor before the maturity date."
Hanyang Securities reiterated its position that it does not expect any issues with the collection, as it has secured a senior collateral structure.
In a statement released on the morning of June 19, Hanyang Securities explained, "Out of our 30 billion won exposure related to JoongAng Ilbo, we have recovered approximately 8 billion won, and we are proceeding with the legal rights process for the remaining 22 billion won following the EOD."
The company added, "We have already secured senior collateral and collateral trust structures, and these rights are protected separately from the debtor's general assets or other creditors. As this structure maintains its independent legal validity regardless of this incident, there will be no impact on the recovery of collateral rights."
Hanyang Securities also stated that the recovery of exposure to the entire JoongAng Group is proceeding as planned.
Hanyang Securities reported, "We recovered a total of 10.3 billion won (related to JoongAng Group exposure) between June 16 and 17. We are in the process of recovering our exposure based on the secured collateral structure, so we do not believe there is a need for additional loan loss provisions."
Previously, in a statement on June 17, Hanyang Securities announced that its total exposure to JoongAng Group, including JoongAng Ilbo and JTBC, stood at 84 billion won, and that it expects 73.1 billion won—or 87% of the total—to be recovered smoothly within the year.
(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.