JoongAng Ilbo has been declared in first-stage default after failing to meet a request for early repayment of 22 billion won in commercial paper (CP).
According to the Financial Supervisory Service's electronic disclosure system on Friday, JoongAng Ilbo disclosed the previous day that it "received a request on the 18th for early repayment of CP held by Hanyang Securities (totaling 22 billion won), but confirmed it had been declared in first-stage promissory note default after failing to settle the payment due to insufficient deposits."
The notes declared in default were CP issued on March 31 this year, with actual maturity dates of December 7 this year and March 30, 2027, in amounts of 12 billion won and 10 billion won, respectively. However, amid the recent liquidity crisis at JoongAng Group, major affiliates filed for rehabilitation, and JoongAng Ilbo also moved to pursue a workout (corporate restructuring program), triggering an event of default (EOD), after which Hanyang Securities is said to have demanded early repayment. An EOD is a clause that allows creditors to demand repayment before maturity when specific conditions, such as a credit rating downgrade, occur.
In a statement the previous day, JoongAng Ilbo responded to Hanyang Securities' early repayment request by saying, "As we are currently pursuing a workout with our main creditor bank, fairness must be maintained among all creditors," adding that "it is difficult to make individual early repayment to a specific creditor before maturity."
