Hanyang Securities headquarters. Hanyang Securities
Hanyang Securities (001750.KS) said it expects to recover most of its exposure related to the cash-strapped JoongAng Group by the end of this year.
In a press release Wednesday, Hanyang Securities said recovery of its 84 billion won exposure related to JoongAng Ilbo and JTBC is proceeding as planned, with about 73.1 billion won, or approximately 87% of the total, expected to be recovered by year-end. The company said the remaining amount could also be recovered by February next year.
Five JoongAng Group affiliates recently entered corporate rehabilitation proceedings. The previous day, NICE Investors Service said its analysis of exposure by financial firm showed Hanyang Securities had the largest exposure. As concerns mounted over deteriorating earnings, Hanyang Securities shares closed at 20,100 won, down 11.59% from the previous trading day.
Hanyang Securities stressed that its JoongAng Group exposure is managed based on collateral rights over key assets. In particular, assets managed through an accounts receivable collateral trust structure operate insulated from JoongAng Ilbo and JTBC, the company explained, meaning funds can be recovered through cash flows generated from the related accounts receivable regardless of whether rehabilitation proceedings or workouts take place.
Hanyang Securities also said some repayments have already been completed this month, and including additional repayments scheduled, it expects to recover about 16 billion won by the end of this month. It further projected cumulative recovery would reach about 44.6 billion won by the end of September.
Hanyang Securities said it is closely managing the related assets based on secured cash flows and collateral structures, and plans to continue reducing its exposure according to the planned schedule.
“Recovery is proceeding smoothly based on currently secured cash flows,” a Hanyang Securities official said. “We will continue to closely manage the related assets while maintaining transparent communication to enhance trust with the market and shareholders.”
Earlier, JTBC declared a default on Sept. 12 after failing to repay 20.6 billion won in securitized borrowings at maturity. On Sept. 14, JoongAng Holdings, JoongAng P&I, Megabox JoongAng, and Contentree JoongAng filed for rehabilitation proceedings with the Seoul Rehabilitation Court, and JTBC also filed for rehabilitation the following day, Sept. 15.