Saneun, Taeyoung Construction Creditors' Association Convened... Workout Resolution by the 11th

"Taeyoung Group Must Make Strong Self-Rescue Efforts"

Taeyoung Construction, facing a liquidity crisis due to excessive joint debt from real estate project financing (PF), has applied for a workout, prompting the main creditor bank, Korea Development Bank, to notify the convening of the creditors' council.

On the 28th, Korea Development Bank announced that it had notified the convening of the 1st Financial Creditors' Council to decide on the commencement of a joint management procedure (workout) for Taeyoung Construction and Taeyoung Group. This is a measure taken by the main creditor bank following Taeyoung Construction's application for a workout under the Corporate Restructuring Promotion Act on the same day.

On the 28th, Taeyoung Construction, which is experiencing a liquidity crisis due to real estate project financing (PF), applied for a workout (corporate restructuring). The Taeyoung Construction flag is fluttering in the wind at the Taeyoung Building in Yeongdeungpo-gu, Seoul. Photo by Jinhyung Kang aymsdream@

At the 1st Financial Creditors' Council, discussions and decisions will be made regarding whether to commence the workout, the suspension and duration of creditor actions, the conduct of due diligence for establishing a corporate improvement plan, and the management standards for PF project sites. Korea Development Bank plans to hold a creditors' briefing session on the 3rd of next month to explain and discuss Taeyoung Construction's management status, self-rescue plan, and council agenda, and intends to proceed with the resolution process for the commencement of the workout by the 11th.

Taeyoung Construction is a mid-sized construction company ranked 16th in construction capability evaluation and has maintained stable business performance. However, due to recent aggressive expansion of PF projects, the proportion of PF guarantee debt is excessively high compared to other construction companies. With the continued downturn in the real estate market, it has become difficult to extend or refinance maturing PF loans, and the company judged that overcoming the crisis would be difficult without forced adjustment of financial debt and PF guarantee debt, leading to the application for a workout under the Corporate Restructuring Promotion Act.

Korea Development Bank stated, "Due to Taeyoung Construction's characteristics of operating numerous and diverse PF projects and social overhead capital (SOC) projects, the proportion of guarantee creditors including the PF lending consortium is very high. For the normalization of Taeyoung Construction, strong self-rescue efforts by Taeyoung Construction and Taeyoung Group, as well as cooperation from financial creditors and the PF lending consortium, are essential." The bank added, "We request active cooperation from the creditors' group and all stakeholders to minimize the impact on subcontractors, buyers, creditors, and shareholders by ensuring that Taeyoung Construction can conduct normal business operations through the smooth progress of the workout."

This content was produced with the assistance of AI translation services.