JTBC's Rehabilitation Proceedings Begin... Voluntary Restructuring Ends

[Financial News] The Seoul Bankruptcy Court has decided to begin corporate rehabilitation proceedings for broadcaster JTBC. JTBC had spent about three months trying voluntary restructuring with creditors, but the effort failed to produce results, and the court has now moved ahead with full rehabilitation proceedings.
The Rehabilitation Division 2 of the Seoul Bankruptcy Court, presided over by Judge Jung Joon-young, issued the decision to begin rehabilitation proceedings for JTBC on the 28th.
JTBC applied for rehabilitation proceedings on June 15 and also requested the ARS process at the same time. The court initially put off deciding whether to open the proceedings that month, then extended the suspension once and allowed the company to continue voluntary restructuring talks with creditors until the 30th of this month. However, the parties failed to reach a final agreement, and the court ended the ARS process and opened rehabilitation proceedings on this day.
The court determined that JTBC had fallen into financial collapse because of a liquidity crisis. Since the COVID-19 pandemic, platforms such as OTT services have grown rapidly at home and abroad, while production costs, including appearance fees and labor costs, have continued to rise. At the same time, the broadcasting advertising market has shrunk as viewership has declined. The court also cited the short-term surge in spending from Olympic broadcasting rights fees and the broader liquidity crisis at JoongAng Holdings as contributing factors.
The court decided not to appoint a separate administrator and instead to treat JTBC's current representative as the administrator. However, the administrator may be replaced if any fault on the part of management is later confirmed.
The rehabilitation process will proceed under the supervision of the creditors' council. The council, made up of major creditors, will select advisory institutions such as law firms and accounting firms to discuss ways to improve JTBC's financial structure. A chief restructuring officer, appointed on the recommendation of the council, will oversee cash flow and related finances.
JTBC must submit a list of creditors by Oct. 8, and the claim filing period runs through Nov. 6. Rehabilitation claims and secured rehabilitation claims listed on the roster will be deemed filed without separate notification.
Han Young Accounting Corporation, acting as the investigator, will examine JTBC's asset value, going-concern value and liquidation value, and submit a report by Dec. 8. Rehabilitation is approved when the going-concern value exceeds the liquidation value. A briefing for interested parties will be held by Dec. 31, and JTBC must submit its final rehabilitation plan by Jan. 29 next year.
 
[email protected] Choi Eun-sol Reporter