JTBC is moving toward court-supervised rehabilitation after deciding not to seek another extension of its autonomous restructuring support, or ARS, program with creditors. The broadcaster’s current ARS period is set to end Aug. 30.
The move comes after JTBC and its creditors failed to reach a final agreement on funding support and a restructuring plan. Under South Korean bankruptcy procedure, the Seoul Rehabilitation Court will weigh the company’s going-concern value against its liquidation value before deciding whether to open formal rehabilitation proceedings.
JTBC declared default on June 12 after failing to repay 20.6 billion won, or about $13.4 million, in asset-backed debt at maturity. Since then, JTBC and four other affiliates of the JoongAng Group have sought court rehabilitation, while JoongAng Ilbo separately entered a creditor-led workout, a debt restructuring process used in South Korea for companies trying to avoid deeper insolvency.
Four other JoongAng Group affiliates already have rehabilitation proceedings underway. If the court finds JTBC’s liquidation value higher than its going-concern value, the rehabilitation case could be dismissed.
