Urgently Convened Bank Creditors: "If Taeyoung Fails to Implement Self-Rescue Plan, 'Workout' Not Possible"

Attendance of Deputy Heads of 5 Major Banks Including KB Kookmin and Shinhan
Immediate Support of 89 Billion KRW for Taeyoung Ind.'s Sale Proceeds and Call for Additional Measures
"Taeyoung Responsible for All If Workout Cannot Start"
"Pressure to Immediately Implement Self-Rescue Plan Through Board Resolution"

The creditor group of Taeyoung Construction has repeatedly urged Taeyoung Group to firmly implement the self-rescue plan, including the immediate support of the proceeds from the sale of affiliates promised at the time of the workout application.

On the 5th at 2 p.m., the Industrial Bank of Korea, the main creditor bank of Taeyoung Construction, held a meeting with vice presidents of major creditor banks such as KB Kookmin, IBK Industrial, NH Nonghyup, Shinhan, Woori, and Hana Bank regarding the promotion of Taeyoung Construction's workout, and announced this.

The creditor group pressured Taeyoung Group to immediately execute through board resolutions the following promises made at the time of the workout application: ▲ immediate support of the unfulfilled portion of 89 billion KRW from the sale proceeds of Taeyoung Industry ▲ the three self-rescue plans (sale of Ecobit and support of proceeds, provision and sale of Blueone collateral, provision of Pyeongtaek Silo collateral).

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@

Meanwhile, the creditor group raised their voices, saying that in order for Taeyoung Construction and the group to normalize, it is essential to first restore the trust of numerous creditors and other stakeholders, and urged them to present sincere measures.

The creditor banks stated, "We believe that the restoration of trust by the affiliate shareholders, including financial creditors and numerous stakeholders, is the first step for the normalization of not only Taeyoung Construction but also Taeyoung Group," and strongly demanded, "The affiliate shareholders should immediately implement the previously presented self-rescue plans and sincerely present all possible measures that the affiliate shareholders and Taeyoung Group can take for the normalization of Taeyoung Construction."

In particular, the creditor group emphasized that if Taeyoung Group does not implement the self-rescue plan, the workout cannot be initiated and the normalization process will be halted. They stated that if even the basic preconditions are not met, they will not secure the 75% approval by the first consultation meeting resolution date on the 11th.

The creditor banks said, "In this case, the insolvency of Taeyoung Construction will materialize, and the normalization process will inevitably be suspended," and pointed out, "All economic damages and social trust collapse caused by this are the responsibility of the affiliate shareholders and Taeyoung Group."

They also criticized Taeyoung Group for prioritizing the resolution of TY Holdings’ joint guarantee debt to maintain the affiliate shareholders’ management rights over the implementation of the self-rescue plan. The creditor group further stated, "We express great disappointment and concern over the behavior that distorts the principles and standards established during the corporate restructuring process and the difficulty in obtaining creditor consent for the initiation of the workout."

[Image source=Yonhap News]

Meanwhile, Taeyoung Group announced the previous day that it had fulfilled its promise by supporting Taeyoung Construction with the full 154.9 billion KRW from the sale proceeds of Taeyoung Industry. Taeyoung Group explained that 40 billion KRW of the sale proceeds was used to pay subcontractors immediately after the workout application, 89 billion KRW was used to repay retail bonds among the joint debts of the holding company TY Holdings, and the remaining 25.9 billion KRW was injected as operating funds for construction sites on the day of the creditor briefing on the 3rd.

Contrary to Taeyoung Group’s claim, the creditor group holds the position that it is inappropriate for the sale proceeds of Taeyoung Industry to be used to resolve the joint debt linked to TY Holdings. Since the joint debt of TY Holdings is an issue that TY Holdings itself must resolve, it was not a decision to settle only the debt relationship of Taeyoung Construction, which applied for the workout (corporate restructuring process).

Questions have also been raised about the 48.4 billion KRW reportedly contributed by the owner family. Taeyoung Group explained that Chairman Yoon Seok-min of Taeyoung Group supported Taeyoung Construction with the entire 41.6 billion KRW from the sale proceeds of his Taeyoung Industry shares (after deducting capital gains tax), and separately invested 3 billion KRW in purchasing bonds of Taeyoung Construction’s subsidiaries. Taeyoung Group also stated that Founder Chairman Yoon Se-young, who returned to Taeyoung Group’s management, invested 3.8 billion KRW in purchasing bonds of Taeyoung Construction and its subsidiaries.

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