Final Unsubmitted Taeyoung PF Project Sites for 'Measures' to Be Arbitrarily Included in 'Corporate Improvement Plan'

Among 59 Taeyoung PF Sites, Fewer Than 10 Sites Have Not Submitted... KDB Bank "Encourages Submission"
Many Sites Still Under Due Diligence... Sites Scheduled for Due Diligence
Submitted 'Action Plans' Reviewed for Suitability and Reflected in 'Corporate Improvement Plans'
'Magok CP4' Major Lenders' Internal Investment Review Process... 370 Billion KRW to Be Invested in April

[Image source=Yonhap News]

The submission of project financing (PF) site-specific handling plans for the establishment of Taeyoung Construction's corporate improvement plan is being delayed past the deadline. Although the main creditor bank, the Korea Development Bank, has been continuously urging the sites that have not yet submitted their handling plans to do so, it is known that there are sharply conflicting interests within the creditor group regarding these sites. The Korea Development Bank plans to arbitrarily 'assume' handling plans based on certain criteria for the sites that have not submitted them and establish the corporate improvement plan accordingly.

According to the financial sector on the 8th, among the 59 PF sites of Taeyoung Construction, which applied for a workout (corporate financial restructuring), it has been confirmed that fewer than 10 sites have still not submitted their handling plans. In some banks, half of the related PF sites have not submitted handling plans, and some have not even conducted on-site inspections.

The Korea Development Bank initially requested the individual PF site creditor groups to submit handling plans by the 10th of last month, and extended the deadline to the 26th as the situation at each site was difficult. Nevertheless, only about half of the sites submitted their handling plans by the 26th. The remaining 20 or so sites submitted their plans after the deadline recently, but some sites are still struggling to submit them.

The Korea Development Bank plans to continue urging the remaining sites that have not submitted handling plans to do so. Although the submission deadline has passed, there are no enforcement measures, and this is interpreted as a strong intention to collect as many handling plans as possible necessary for establishing the corporate improvement plan.

However, since each PF site's handling plan must go through a suitability review process, for the sites that do not submit their plans until the last minute, the Korea Development Bank and the accounting firm responsible for Taeyoung Construction's due diligence will arbitrarily assume the situation and reflect it in the corporate improvement plan. The corporate improvement plan, which includes PF site handling plans, financial restructuring measures (debt adjustment of main creditor and guarantee claims), liquidity procurement plans, company management plans, and management control measures, will be finalized after a creditor meeting scheduled for April 11.

A financial authority official explained, "Since a creditor meeting to resolve the corporate improvement plan is scheduled for April 11, the Korea Development Bank is encouraging submission," adding, "Ultimately, those who fail to submit will have their improvement plans established based on assumptions considering the conditions of each site."

The process of collecting handling plans for all 59 PF sites is expected to be challenging. Some sites are still undergoing on-site inspections by the creditor group or have not even started inspections. These sites plan to complete inspections in March, but since handling plans must be finalized through internal discussions within the creditor group, it is uncertain whether the schedule can be met by the April financial creditor meeting.

A key creditor group official said, "It is difficult to quickly present handling plans for sites where there are significant differences of opinion among PF creditor groups," adding, "Since this is a process requiring consultation among all stakeholders regardless of loan size, we can only wait and see."

Meanwhile, the creditor group of Taeyoung Construction's 'Magok CP4' site, which was the first to submit a handling plan and decided to continue the project, plans to invest 370 billion KRW in construction costs in April. Shinhan Bank, Kyobo Life Insurance, IBK Industrial Bank of Korea, and others included in the creditor group plan to finalize individual investment amounts through internal investment review committees in March.

A creditor group official explained, "The procedure to discuss who will bear how much of the 370 billion KRW remains," adding, "Most financial institutions, including Shinhan Bank, will proceed with a joint burden, and the interest rate is likely to be formed around 8%."

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