Taeyoung Group Stock Finds Its Position 'Investment Warning'

Resolving Uncertainty in the Amendment
Taeyoung Construction and TY Holdings Stocks Rise
SBS Falls on Decision to Pledge Shares as Collateral

The stock price of Taeyoung Group, which had been volatile due to issues with real estate project financing (PF) defaults, is finding its footing. After Taeyoung Group announced a workout (corporate financial restructuring) self-rescue plan, uncertainty was resolved, leading to a rise in the sharply fallen stock prices of Taeyoung Construction and the holding company TY Holdings. On the other hand, SBS, which had surged on the possibility of a sale, fell following the announcement that Taeyoung Group would secure liquidity by pledging shares as collateral if necessary, instead of selling.

On the 9th, Taeyoung Construction closed at 3,440 won, up 245 won (7.67%) from the previous trading day. The stock price of Taeyoung Construction recently resembled a roller coaster. It plunged over two days on December 26 (-2.61%) and 27 (-19.57%) last year, influenced by concerns over bankruptcy. On the 28th, it fell more than 19% in early trading but recovered most of the losses after news of the workout application. The stock price then continued an upward trend. The closing price on this day was 48.60% higher than 2,315 won on December 28 last year, approaching the closing price of 3,550 won on December 1 last year.

The related stocks TY Holdings and SBS showed similar patterns. TY Holdings was at 4,945 won on December 1 last year but dropped to 4,225 won by the 28th of the same month. However, like Taeyoung Construction, the stock price rose following the workout application news, closing at 4,695 won on this day.

The market interpreted the workout application as a resolution of uncertainty, which is believed to have lifted the stock prices of Taeyoung Construction and TY Holdings.

In the case of SBS, the stock price fell as the possibility of a sale disappeared. SBS's stock price, which was 27,000 won on December 22 last year, rose to 35,450 won on the 4th. This was due to speculation that TY Holdings, the largest shareholder, might sell its stake in SBS amid Taeyoung Construction’s liquidity crisis caused by real estate PF issues. However, Taeyoung Group proposed pledging shares as collateral instead of selling as part of its self-rescue plan. As a result, with the sale possibility gone, SBS closed at 29,250 won, down 1,850 won (5.95%) from the previous trading day.

Although the stock prices have returned to past levels, it is uncertain whether the upward trend will continue. Generally, when entering debt restructuring, there may be a free capital reduction followed by debt-to-equity conversion, turning bonds into stocks. This inevitably leads to dilution of equity value, causing losses for investors. A financial investment industry official explained, "Currently, most investments related to Taeyoung Group stocks are speculative. Since it is difficult to be confident about the stock price direction after the workout process, caution is necessary."

Meanwhile, Taeyoung Group announced on the same day that it would complete procedures to implement and commit to the existing four major self-rescue plans and presented additional self-rescue measures. Specifically, these include ▲ pursuing fundraising using other affiliates such as SBS Medianet ▲ providing liquidity and supporting Taeyoung Construction by pledging shares of TY Holdings held by the major shareholder and SBS shares held by TY Holdings as collateral if liquidity shortages worsen.

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