“Daou Technology’s debt burden to rise with JoongAng Ilbo acquisition”... What impact on CJ and Shinsegae? [fnMarketWatch]

[Financial News] Daou Technology’s debt burden is expected to increase as a consortium of Daou Kiwoom, CJ and Shinsegae seeks to acquire JoongAng Ilbo. An analysis suggests that if the KRW 250 billion acquisition funding is raised entirely through borrowing, net debt could rise to about 3.5 times its current level. The burden on financial stability could also grow, particularly as this coincides with investment in the construction of a cloud data center (CDC) in Jukjeon.
According to Korea Investors Service on the 21st, if Daou Technology contributes KRW 250 billion to JoongAng Ilbo’s rights offering and finances the entire amount through external borrowing, its standalone net debt would increase from KRW 100.7 billion at the end of June this year to KRW 350.7 billion. Total borrowings would likewise rise from KRW 385.5 billion to KRW 635.5 billion.
Financial stability indicators would also deteriorate. Reliance on borrowings would rise from 27.3% to 38.3%, while the debt ratio would increase from 61.8% to 90.5%. The net debt/EBITDA ratio would also climb from 1.1x to 3.9x, bringing it close to the 5x threshold set by Korea Investors Service for an increased likelihood of a credit rating downgrade.
This analysis is based on the assumption that Daou Technology would cover half of the KRW 500 billion rights offering by JoongAng Ilbo and finance the entire amount through borrowing. The actual contribution amount and funding method have not been finalized. Earlier, on the 20th, the consortium of Daou Kiwoom, CJ and Shinsegae was selected as the preferred bidder for the acquisition of JoongAng Ilbo. The transaction is being pursued through a third-party allotment of shares.
In a report, Lee Ju-ho, a senior researcher at Korea Investors Service, said, “With investment in the construction of the Jukjeon CDC (cloud data center) continuing since 2025, the additional funding needs for the acquisition of JoongAng Ilbo would make an increase in the debt burden unavoidable in the short term.”
However, Korea Investors Service assessed that the debt burden would remain manageable, taking into account Daou Technology’s stable earnings structure, dividend income from subsidiaries and the value of its assets.
It also concluded that the impact on the creditworthiness of CJ and Shinsegae, which are participating in the consortium, would be limited. Korea Investors Service assessed that the burden from the investment would not be significant, given the two companies’ earnings-generating capacity and financial flexibility.
The market sees Daou Technology’s actual contribution and the additional borrowing required for the Jukjeon CDC investment as key variables going forward. Korea Investors Service plans to monitor the progress of JoongAng Ilbo’s workout and bondholders’ meetings, how the rights offering proceeds are used, and whether the consortium provides additional financial support.


[email protected] Kim Hyun-jung Reporter