Miss Universe owner initiates business restructuring: Debunks bankruptcy claims
JKN Global Group, the Thai media powerhouse and recent acquirer of the Miss Universe pageant, has taken a bold step by filing for a “business rehabilitation” plan, akin to bankruptcy. Purchased for US$20 million in 2022, the firm disclosed on Thursday, November 9, 2023, its petition submission to reorganize debt and liabilities, accepted by Thailand’s Bankruptcy Court, according to CNN. Contrary to speculations, Anne Jakapong Jakrajutatip, the company’s owner and media magnate, clarified that it isn’t a bankruptcy filing but a distinct alternative.
The announcement arrives just a week before the 72nd edition of the Miss Universe pageant on November 18 in El Salvador, a global event with a seven-decade history that will be broadcast to almost a billion viewers in over 165 countries. The Central American nation extended an undisclosed sum of money to JKN, securing the honor of hosting the prestigious pageant.
In this edition, the current titleholder, R’Bonney Gabriel of the United States, will pass on her crown. JKN, led by transgender rights advocate Anne Jakrajutatip, stands as a Thai multinational conglomerate.
Despite reporting net profits since 2015, JKN doesn’t generate enough cash to pay for its large acquisitions of media content and dramas and, as a result, relies on escalating debt. Initially, the company aimed to leverage Miss Universe for overseas broadcasting rights expansion. Following its US$20 million debt-financed acquisition from IMG in 2022, JKN expressed intentions to grow the pageant by expanding in Asia and releasing branded merchandise.
Under JKN’s ownership, the pageant underwent significant changes, welcoming mothers and married women for the first time and featuring at least two trans women, Miss Portugal Marina Machete and Miss Netherlands Rikkie Kollé. This progressive move aligns with the Miss Universe Organization’s recent statement, affirming, “Trans women are women, full stop.”
The financial strain arose as JKN financed the Miss Universe acquisition through bonds, missing a THB610 million (~US$17 million) repayment due on September 1, citing global and domestic economic challenges. As of June 30, JKN had available cash of only THB113 million (~US$3.2 million), which wasn’t enough to pay what was due, and faces total debt of THB5 billion (~US$139 million), a sizable portion of which is owed to bond investors.
As the result of the lack of free cash generated after acquisitions, JKN’s debt escalated from 32% to 105% of equity over the past five years.
Facing a liquidity crunch, the company’s stock fell 57% from THB2.52 on August 29 to THB1.09 on November 8, prompting the “business rehabilitation” plan submission. The plan seeks debt repayment extension, waiver of interest charges, and the exploration of financial support from new investors or institutions, along with the sale of non-productive assets.
Despite the filing, JKN asserts that the Miss Universe pageant will proceed as planned. The rehabilitation petition aims to solve the liquidity problem through legal mechanisms, ensuring fair protection for stakeholders. The company plans to continue operations under court proceedings while expressing confidence in the event’s success.
Looking ahead, JKN’s CEO envisions fundamental changes to the Miss Universe show, including the creation of a reality series capturing contestants’ journeys, the buildup to the competition, and the victorious moments, as reported by TIME.
Analysts forecast that, due to the rehabilitation, JKN will generate positive free cash flows of THB405 million and THB447 million by the end of 2023 and 2024, respectively, which should help pay down debt.
Just like a Miss Universe contestant’s evening gown, JKN Global might be going through a few alterations, but the show must go on! After all, who said a little financial samba can’t add some flair to the runway of business? Stay tuned for the next episode of ‘Finance and Fabulous’ — where debts may be high, but the heels are higher!