Seoul: JoongAng Ilbo Co., a major South Korean newspaper publisher, has received approval for a creditor-led debt workout program, as industry sources indicated. Main creditor Hana Bank and other lenders reached this decision following thorough consultations.

According to Yonhap News Agency, JoongAng Ilbo applied for the debt workout program on June 19 due to liquidity issues at its parent company, JoongAng Group. This application followed the company's inability to meet a request for the early repayment of 22 billion won (US$14.38 million) in commercial paper.

Under the approved plan, creditors will suspend debt collection efforts for three months, enabling the company to circumvent court-led rehabilitation proceedings. JoongAng Ilbo is set to develop a business normalization plan, based on a due diligence review by an accounting firm, which will be implemented pending creditor approval.

The company's self-rescue strategy includes significant cost-cutting measures, initiatives to generate stable cash flow, asset sales, and the sale of the controlling shareholder's stake. JoongAng Ilbo has also announced plans to negotiate with potential buyers regarding the sale of its management rights.

JoongAng Holdings, which owns a 64.7 percent stake in JoongAng Ilbo, is controlled by the founding family of JoongAng Group. Meanwhile, five other affiliates of JoongAng Group, including broadcaster JTBC and holding company JoongAng Holdings, filed for court-led rehabilitation proceedings last month.