118 Promissory Notes Maturing by April... Totaling 450 Million KRW
Jeon Jaeguk Becomes De Facto Largest Shareholder When Including Friendly Shares
"Plan to Liquidate Wholesale Business Within Six Months"
Repayment May Be Difficult Due to Lengthy Liquidation Process
Bookplus, the fourth-largest book distribution company in South Korea, is facing a liquidity crisis, putting around 600 publishing companies at risk of damage. Bookplus was founded by Jeon Jae-guk (66), the eldest son of former President Jeon Du-hwan, and is the fourth-largest book distributor in the country after Kyobo Book Centre, Woongjin Booksen, and the Korea Publishing Cooperative.
According to the Korea Publishers Association on the 19th, Bookplus CEO Jo Jeong-haeng attended briefings held on the 14th and 18th at the Korea Publishers Association in Donggyo-ro, Mapo-gu, Seoul, and revealed that due to the seizure of the main shareholder A’s company’s main transaction account, cash flow has deteriorated, making it impossible to make normal payments to business partners.
The problem is that 118 promissory notes will mature by the end of April, amounting to approximately 450 million KRW. Although a 100 million KRW note that matured on the 13th was settled just in time to avoid default, there are upcoming notes and the possibility of additional undisclosed debts.
Bookplus plans to cover its debts by selling its subsidiary, The Book Center. Bookplus’s assets total about 18.95 billion KRW, which exceeds its liabilities (15.66 billion KRW) by 3.34 billion KRW. Additionally, Bookplus intends to liquidate its wholesale business segment, which currently has more receivables than payables, within six months to raise funds.
However, the sale of The Book Center and the liquidation of the wholesale business may take time, potentially missing the repayment deadlines for the matured promissory notes.
Jeon Jae-guk, founder of the publishing wholesaler 'Bookplus'.
Do Jin-ho, Chair of the Distribution Policy Committee at the Korea Publishers Association, said, “It seems unlikely that the worst-case scenario of a chain bankruptcy of publishers will occur, but the debt scale is in the hundreds of millions of won, so the risk is not small. Besides the matured promissory notes, there are also amounts that need to be settled immediately but have not been paid. We are closely monitoring the situation and conducting legal reviews.”
Bookplus was established in 1998 by Jeon Jae-guk. In 2019, shareholder A became the largest shareholder through a share sale, but when including friendly shares, Jeon Jae-guk holds a larger stake. Based on the 2023 audit report, shareholder A holds 32.43%, Libro 26.07%, and Jeon Jae-guk 19.71%. Jeon Jae-guk is also the largest shareholder of the bookstore Libro. Amid this situation, Jeon Jae-guk and shareholder A have been in conflict over various company rights, including lawsuits.
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