Five companies within Central Group, including its key affiliate JTBC, have entered corporate rehabilitation procedures just three days after JTBC declared default.
On June 16, legal sources reported that the Seoul Rehabilitation Court's second division, led by Judge Jeong Jun-young, issued a preservation order and a comprehensive injunction against JoongAng Holdings, JTBC, Contentree JoongAng, Megabox JoongAng, and JoongAng P&I the previous day.
The preservation order restricts the disposal of assets to prevent the company from prioritizing payments to specific creditors before the rehabilitation process begins. The comprehensive injunction prohibits creditors from enforcing claims, seizing assets, or auctioning properties, effectively freezing debts.
Earlier, on June 12, JTBC announced its default after failing to repay a 20.6 billion won liquidity loan that matured. Subsequently, JoongAng Holdings, Contentree JoongAng, Megabox JoongAng, and JoongAng P&I filed for rehabilitation on June 14, with JTBC following suit on June 15.
The rehabilitation court has assigned these cases to the second division for collective review. The court plans to conduct hearings with the representatives soon to determine whether to initiate rehabilitation procedures.
This crisis is seen as a manifestation of broader financial burdens across the group, extending beyond JTBC's liquidity issues.
According to credit rating agencies, Central Group's total debt reached 3 trillion won by the end of last year. The debt ratio for the holding company JoongAng Holdings stands at 4,564.7%, while JTBC's is at 2,443.6%, and Contentree JoongAng's is at 1,020.9%.
Inter-company loans and debt guarantees have also contributed to the financial strain. JoongAng Ilbo lent operational funds to JoongAng Holdings, which in turn provided guarantees for debts related to JTBC, Phoenix Sports, and Phoenix JoongAng. JoongAng Ilbo is also reported to have guaranteed debts for JTBC and JoongAng Ilbo M&P.
Credit rating agencies have downgraded the ratings of affiliates following JTBC's default. JTBC's corporate bonds and commercial paper ratings have been downgraded to the lowest level, D, while ratings for JoongAng Ilbo, SLL JoongAng, Contentree JoongAng, and Megabox JoongAng have also been lowered.
Industry analysts believe that Central Group's rapid expansion into broadcasting, film, theater, and leisure over the past decade, coupled with a downturn in the media market, has exacerbated the crisis.
In particular, Central Group invested approximately 700 billion won in securing broadcasting rights for the 2026-2032 Winter and Summer Olympics and the 2026-2030 World Cup but has not achieved the expected returns. The decline in the TV advertising market and the rise of online video services (OTT) have further strained profitability, intensifying liquidity issues due to the burden of large broadcasting rights costs.
Central Group has also attempted to sell its headquarters for 550 billion won but has reportedly failed to resolve its short-term liquidity crisis.
Separately, JoongAng Ilbo has decided to pursue a corporate restructuring process (workout) for its affiliates. Park Jang-hee, CEO of JoongAng Ilbo, stated in a press release that the company is an independent entity separate from the affiliates that have filed for court protection, emphasizing that this is a proactive measure to mitigate risks from the affiliates.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.