'Tae Young Construction Workout' Vote Today... Approval Likely, Results Expected Tomorrow

A vote by creditors to decide whether to initiate a workout (corporate financial restructuring) for Taeyoung Construction is underway. The financial sector expects no major obstacles to approval, as Taeyoung Group has accepted the creditors' demands by expressing its intention to provide TY Holdings shares as collateral, and the government and financial authorities have shown a clear willingness for a smooth market landing.

On the 28th, Taeyoung Construction, which is experiencing a liquidity crisis due to real estate project financing (PF), applied for a workout (corporate restructuring). The entrance of Taeyoung Construction headquarters in Yeongdeungpo-gu, Seoul. Photo by Jinhyung Kang aymsdream@

According to the financial sector on the 11th, the main creditor bank, Korea Development Bank, held the 1st Financial Creditors' Council meeting on the same day to decide on the initiation of Taeyoung Construction's workout through a vote (written resolution) targeting a total of 609 creditors. The voting is scheduled to continue until midnight.

The condition for initiating the workout is the consent of 75% of creditors (based on the reported claims to Korea Development Bank). Although the voting rights related to Taeyoung Construction held by Korea Development Bank and other banks amount to about 33%, and the Construction Mutual Aid Association holds 20%, falling short of 75%, the financial sector believes there will be no significant difficulty in passing the vote.

This is because several subsidiaries of the five major financial holding companies (KB, Shinhan, Hana, Woori, NH Nonghyup) are also part of the creditor group, and many financial institutions influenced by financial authorities are involved. In addition to Korea Development Bank and the five major commercial banks, the major creditor meeting held the previous day saw large attendance from IBK Industrial Bank, Saemaeul Geumgo Central Association, National Agricultural Cooperative Federation, National Credit Union Federation, Korea Federation of Savings Banks, and Korea Credit Finance Association.

Taeyoung Group also accepted the creditors' demands by submitting additional self-help measures after last-minute negotiations. The group implemented or pledged the existing four major self-help plans, including support for Taeyoung Construction from the proceeds of the sale of Taeyoung Industry, and additionally proposed ▲ providing collateral such as SBS Medianet shares ▲ providing collateral of TY Holdings shares held by the major shareholder and SBS shares held by TY Holdings in case of liquidity shortage. Authorities also supported this by suggesting a grace period for the joint debt held by TY Holdings, considering Taeyoung Group's concerns that Taeyoung Construction's workout could escalate into a liquidity crisis for TY Holdings.

The creditor group is also inclined to accept these self-help measures. The creditor group stated at the creditor meeting the previous day, "If Taeyoung Group's self-help plan is implemented as planned, there is a consensus that the initiation of the workout and subsequent due diligence and corporate improvement plan establishment can proceed smoothly."

Meanwhile, voting will continue until midnight, and creditors will convey their approval or disapproval via fax or email. Accordingly, the workout voting results are expected to be announced on the 12th. A creditor group official explained, "Since voting can proceed until midnight, based on precedent, we expect the announcement to be possible around the 12th."

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