Presidential Office to Take "Market Stabilization Measures" Regarding Taeyoung Workout

"Some Construction Companies Struggle but Banks Remain Financially Strong" Caution Urged

The Presidential Office stated on the 28th that it will "take all measures to manage risks and stabilize the market" in response to liquidity issues related to construction companies' project financing (PF), including Taeyoung Construction's corporate restructuring (workout) application.

A Presidential Office official, when asked by Asia Economy about the real estate PF issues triggered by Taeyoung Construction, said, "The government has been comprehensively reviewing the situation through F4 meetings (Finance 4, meetings attended by the Deputy Prime Minister for Economy, Financial Services Commission Chairman, Bank of Korea Governor, and Financial Supervisory Service Governor)," adding this statement.

It is known that Choi Sang-mok, Deputy Prime Minister for Economy and nominee for Minister of Economy and Finance, Kim Ju-hyun, Chairman of the Financial Services Commission, Lee Bok-hyun, Governor of the Financial Supervisory Service, and Lee Chang-yong, Governor of the Bank of Korea, held a meeting the previous day to discuss the possibility of Taeyoung Construction's workout and real estate PF issues.

The official said, "We have been monitoring the real estate and construction market conditions due to prolonged high interest rates and rising construction costs, and have continuously checked the status of major construction companies. Although some construction companies are facing difficulties, banks have strengthened their financial health in the high-interest-rate environment," cautioning against excessive concerns.

He added, "Even if construction companies enter the workout process in the future, workouts benefit not only the applying companies but also financial institutions and partner companies, minimizing economic and social costs and helping all parties involved."

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 Kang Jin-hyung aymsdream@

Taeyoung Construction, ranked 16th in construction capability evaluation, applied for a workout this morning after failing to repay its real estate PF loans. Currently, Taeyoung Construction's PF loans amount to approximately 3.2 trillion won (according to Korea Credit Rating), and the loan amount Taeyoung Construction must repay by the end of this month reaches 395.6 billion won.

Accordingly, the main creditor bank, Korea Development Bank, convened the first financial creditors' meeting to initiate Taeyoung Construction's workout. A workout is a process to extend maturities and provide financial support to companies at risk of bankruptcy but deemed worth rescuing. To start a workout, the consent of 75% of the creditors is required.

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