DaouKiwoom-CJ consortium to sign deal to acquire JoongAng Ilbo this week

SEOUL, Nov. 4 (Yonhap) -- A consortium comprising CJ, Shinsegae and two other companies will sign a deal Thursday to acquire debt-laden South Korean newspaper publisher JoongAng Ilbo Co., the company said Wednesday.

Under the deal, the DaouKiwoom-CJ consortium will purchase 520 billion won (US$388 million) worth of new shares in JoongAng Ilbo, with Daou Technology Inc., CJ Corp., Shinsegae Inc. and Saramin Co. contributing 36.5 percent, 35.7 percent, 14.1 percent and 13.7 percent, respectively.

The agreement, set to be signed Thursday, would make the consortium JoongAng Ilbo's largest shareholder.

In July, JoongAng Ilbo entered a debt workout program led by its main creditor, Hana Bank, and other lenders amid liquidity problems at its parent, JoongAng Group.

JoongAng Ilbo said it will receive all proceeds from the share sale and use the funds to improve its financial health and address risks associated with its debt.

The consortium said it plans to retain all current employees and provide a stable working environment without layoffs.

JoongAng Ilbo also said the consortium pledged to guarantee press freedom and editorial independence.

"We will make efforts to promptly normalize business while faithfully protecting the rights of creditors and investors," Park Chang-hee, president of JoongAng Ilbo, said. "If the new governance structure takes root, we will elevate the competitiveness of our content and our management efficiency by another level."