Financial Supervisory Service convenes financial sector... Urges active support for Taeyoung's partner companies

Senior Deputy Director Sehun Lee Hosts Financial Sector Meeting
Operation of 'SME Financial Difficulty Consultation Center'
Establishment of Financial Market TF within FSC

On the 28th, employees are moving inside the Taeyoung Building in Yeongdeungpo-gu, Seoul, as Taeyoung Construction, experiencing a liquidity crisis due to real estate project financing (PF), applied for a workout (corporate restructuring). Photo by Jinhyung Kang aymsdream@

The Financial Supervisory Service (FSS) has urged the financial sector to provide active support to ensure that Taeyoung Construction's workout application does not become a source of instability in the financial market and construction industry.

On the 29th, according to the FSS, Lee Se-hoon, the Senior Deputy Governor, held a meeting with the Financial Association and deputy heads in charge of loans at major banks, emphasizing this point. Although commercial claims are normally repaid during corporate workouts, Taeyoung Construction has numerous subcontractors, and due to construction delays or stoppages at various sites, these subcontractors may face financial difficulties. Therefore, this is a preemptive measure to prevent the simultaneous insolvency of subcontractors experiencing temporary crises.

Taeyoung Construction has as many as 581 subcontractors. Accordingly, the FSS emphasized caution to prevent any financial transaction disadvantages such as credit limit reductions or additional collateral demands solely because they are subcontractors of Taeyoung Construction. Furthermore, for subcontractors highly dependent on Taeyoung Construction's sales and expected to suffer damage, the FSS requested support through self-debt restructuring programs, including repayment deferrals or interest rate reductions for one year.

For subcontractors eligible for the banking sector's Fast Track financial support program, the FSS also asked banks to jointly provide active support. When a company requests, the main creditor bank conducts a credit risk assessment, and for companies rated B (temporary liquidity shortage), the banking sector jointly offers support programs such as maturity extensions, interest reductions, and new funding.

Senior Deputy Governor Lee said, "As the joint response plan for Taeyoung Construction by related ministries aims to stabilize the financial market, this falls under exemption from inspection and sanction regulations. Therefore, financial companies should actively support subcontractors without concerns about sanctions."

Additionally, the FSS plans to assign specialized counselors to the 'SME Financial Difficulty Counseling Center' to handle complaints and provide financial support guidance related to Taeyoung Construction subcontractors. If subcontractors facing financial transaction disadvantages or difficulties apply for counseling through this center, the FSS intends to contact the relevant financial institutions to promptly resolve complaints and difficulties.

Meanwhile, to prevent the spread of market instability due to Taeyoung Construction's workout, the FSS has formed and started operating a task force (TF) within the FSS to monitor the financial market situation. The TF will monitor the financial market situation following Taeyoung Construction's workout application and closely examine four areas: ▲ progress of Taeyoung Construction's workout ▲ overall construction industry ▲ soundness of financial companies ▲ and the funding market. If any abnormal signs occur, the TF plans to respond swiftly in cooperation with related ministries.

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