Used 30% Annual Interest Rate... Gyeongnam Dongwon Construction Industry Ultimately Bankrupt
[Asia Economy Yeongnam Reporting Headquarters Reporter Lee Seryeong] Dongwon Construction Industry in Changwon, Gyeongnam, ultimately went bankrupt due to project financing (PF)-related credit market tightening and loan restrictions imposed by financial institutions.
According to the construction industry on the 30th, Dongwon Construction Industry, headquartered in Seongsan-gu, Changwon City, ranks 18th in Gyeongnam and 388th nationwide among mid-sized general construction companies.
It is reported that the company failed to settle promissory notes totaling 2.2 billion KRW due on two occasions, the 25th and 28th, with Gyeongnam Bank.
Industry insiders expressed concerns about damages to partner companies and construction halts, as Dongwon Construction Industry has been involved in construction sites in Changwon, Busan, Daegu, and other areas since 2000.
CEO Jang Ki-young stated in a press release on the 29th, “Unable to secure funds from institutional finance, we tried to overcome the bankruptcy crisis by mobilizing high-interest private loans exceeding 30% annually as a self-help measure, but we could not endure the high interest.”
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He added, “We apologize for putting numerous partner and related companies at risk of a chain bankruptcy. We will do our best to minimize the damage to partner companies and the negative impact on the local economy.”
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