Update – JKN bondholders approve the extension as company restructures its businesses

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Embattled owners of JKN Global Group Plc (JKN) got a respite from the problems facing the company today as bondholders gave their greenlight to the planned extension of repayments as the firm has undertaken restructuring.

The bondholders meeting approved with 97% of those present at the meeting to not call for a default to the missed payment by JKN. JKN said in a statement to the Stock Exchange of Thailand at around 18:00 today that it had the approval to extend the timeframe for the repayment.

JKN, a company that provides content and is owner of the Miss Universe pageant rights across the world, has been embroiled in financial difficulties after the firm missed the payment on one of its bonds that were due on September 1st this year.

JKN in a statement to the Stock Exchange of Thailand (SET) had stated that it was facing challenges to fully repay its principal and interests on the bondholders and that on the due date of the bond it could only repay 156.6 million out of the 443.4 million Baht that was due of that particular bond that was issued.

A bondholders meeting was called for on September 27 to seek their approval to extend the payments for the 1st tranche because a default on that tranche would trigger a ‘Call Default’ meaning all other bonds have a clause that states that if a bond payment is missed then other tranches would also be considered as default and bondholders could demand payments immediately.

Restructuring To Survive

Jakkaphong Jakrajuthatip, the CEO and major shareholder of JKN, had stated that it was the intention of the JKN to repay the bondholders and that all steps would be undertaken to make sure that the company remains solvent.

As part of the restructuring JKN has managed to shelve some of its non-core businesses, cut staff and form partnerships with others in order to show to the bondholders that the firm is doing something in order to mitigate the risk of falling into a ‘call default’.

“If you look at what JKN has done you will see that they have managed to form alliance with TOP News for their Digital TV,” a leading issuer of the bonds told Thai Enquirer.

The source said that he does not believe that JKN would fall in the default category because the firm has managed to get pre-dated cheques signed off by the owners of TOP News for “5 ½ years”.

“JKN has cheques signed that would see monthly payments for all those years,” the source said, and this is the first step that JKN has undertaken.

He added that other steps that are in the pipeline are the likes of

  1. Raising capital of JKN by 1 billion Baht via a private placement and JKN’s owner Jakkaphong has already identified a potential investor.
  2. Possibly bringing in a minority shareholder to take stake in the firm that handles the Miss Universe pageant, and a Mexican investor has been identified.
  3. Raising the cost of participation in the Miss Universe pageant, whereby some countries only pay as little as US$ 50,000 to participate.
  4. Continue to sell more non-core businesses.

“All this coupled with the planned giveaways (including airfare and boarding) to watch the Miss Universe pageant in El Salvador on November 18th for bondholders who have exposure of a certain level are likely to sweeten the offer to the bondholders,” the source added.

Read related story from Thai Enquirer that was run on September 1sthttps://www.thaienquirer.com/50580/rising-interest-rates-recession-fears-and-aversion-to-risky-assets-by-investors-plays-big-role-in-upheaval-in-thai-bond-market/

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