Creditors: "Support for TY Holdings is to protect management rights... Tae Young Construction must pay 89 billion won"

The creditors of Taeyoung Construction stated on the 5th that regarding Taeyoung Group's use of 89 billion KRW from the sale proceeds of Taeyoung Industry to repay the holding company TY Holdings' debt, "It is very difficult to agree to the commencement of a workout (corporate improvement process) under these circumstances," and "We once again urge the immediate support of the 89 billion KRW to Taeyoung Construction as previously promised."

Taeyoung Construction, which applied for a workout due to liquidity issues in real estate project financing (PF), has completed a creditors' briefing session. On the 4th, the traffic light in front of Taeyoung Construction's headquarters in Yeouido, Seoul, turned red. Yoon Se-young, the founding chairman of Taeyoung Group, acknowledged management's mistakes during the briefing and requested consent for the workout, but the main creditor bank, the Korea Development Bank, asked for an additional self-rescue plan. Photo by Kang Jin-hyung aymsdream@

The creditors of Taeyoung Construction, including the Korea Development Bank, issued a statement on the same day, saying, "Using the funds originally intended to support Taeyoung Construction to repay the joint guarantee debt and reduce TY Holdings' risk is for the benefit of TY Holdings (not Taeyoung Construction)," expressing their position.

Earlier, the Korea Development Bank and Taeyoung Group had agreed to support 154.9 billion KRW from the sale proceeds of Taeyoung Industry as a self-rescue plan before the workout of Taeyoung Construction. However, Taeyoung Group allocated 89 billion KRW of this amount to repay the joint guarantee debt of the holding company TY Holdings. Although the creditors, including the Korea Development Bank, strongly oppose this, Taeyoung Group maintains the stance that "TY Holdings directly repaid the debt on behalf of Taeyoung Construction, which must immediately repay the debt upon workout application, in order to protect individual investors."

The creditors stated, "Taeyoung Group's claim distorts the funds used for TY Holdings' joint guarantee debt for the purpose of maintaining management rights as support for Taeyoung Construction," and added, "Taeyoung Group argues that 'TY Holdings directly repaid the debt on behalf of Taeyoung Construction, which must immediately repay the debt upon workout application, to protect individual investors,' but this is a mistaken claim that shows a complete lack of understanding of the basic principles and procedures of the workout."

Furthermore, the creditors emphasized, "Upon applying for the workout, all financial debts of Taeyoung Construction are temporarily deferred, and if the creditors agree to the commencement of the workout, even if individuals hold the bonds, how to handle this part is decided through negotiation," and "The issue of how to handle Taeyoung Construction's financial bonds should be decided through discussions among Taeyoung Construction's financial creditors during the workout process."

The creditors concluded, "During the due diligence and corporate improvement plan review period related to the workout, the company needs to secure substantial liquidity to operate normally. If the major shareholder does not secure a responsible plan to raise the insufficient funds, creditors find it very difficult to agree to the commencement of the workout," and "Creditors urge Taeyoung Group to immediately support 89 billion KRW to Taeyoung Construction as promised at the time of the workout application."

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