Taeyoung, Partial Progress on Self-Rescue Plan... Will They Also Accept 'Providing TY Holdings Shares as Collateral'?

Partial Progress in Implementing the 4 Major Self-Rescue Measures
Workout Shows 'Green Light'

On the 8th, Taeyoung Group decided to implement four major self-rescue plans related to Taeyoung Construction's workout (corporate improvement process). In addition, it was reported that they are also reviewing whether to accept the creditors' additional self-rescue plan request to provide shares of the holding company TY Holdings as collateral. Accordingly, there is an interpretation that a green light has been turned on for the commencement of Taeyoung Construction's workout, which will be decided at the creditors' council meeting on the 11th.

According to the financial sector on the 8th, Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, Lee Chang-yong, Governor of the Bank of Korea, Kim Ju-hyun, Chairman of the Financial Services Commission, and Lee Bok-hyun, Governor of the Financial Supervisory Service, held an F4 (Financial 4) meeting that day. Kang Seok-hoon, Chairman of KDB Industrial Bank, also attended the meeting.

[Image source=Yonhap News]

At the meeting, the Industrial Bank explained that Taeyoung showed some progress in implementing the four major self-rescue plans submitted at the time of the workout application. The four major self-rescue plans include supporting Taeyoung Construction with the sale proceeds of Taeyoung Industry (154.9 billion KRW), selling Ecobit and supporting Taeyoung Construction with the sale proceeds, providing shares of Blueone as collateral and promoting their sale, and providing collateral of 62.5% of Pyeongtaek Silo.

Previously, Taeyoung Group sparked controversy over non-fulfillment of promises by using 89 billion KRW out of the 154.9 billion KRW sale proceeds of Taeyoung Industry for debt repayment of TY Holdings instead of Taeyoung Construction. However, under pressure from the creditors including the Industrial Bank, financial authorities, and even the presidential office, they surrendered. Taeyoung Group has agreed to support Taeyoung Construction with the 89 billion KRW of unfulfilled funds.

Furthermore, it is reported that the plan to provide the major shareholder shares of the holding company TY Holdings as collateral, which was raised as an additional self-rescue plan, is also being actively discussed. Governor Lee also pressured Taeyoung at a press briefing held on the 4th to prepare an additional self-rescue plan by utilizing shares of the holding company TY Holdings.

Industry observers believe that if Taeyoung not only implements the existing four major self-rescue plans but also offers TY Holdings shares as collateral, there is a high possibility that a green light will be turned on for Taeyoung Construction's workout, which had been at a deadlock.

Meanwhile, the Industrial Bank plans to hold the 1st Financial Creditors' Council on the 11th to decide whether to commence Taeyoung Construction's workout. The commencement of the workout requires the consent of more than 75% of the creditors (based on credit extension amount).

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