Taeyoung Construction Begins 'Normalization Process'... Signs Agreement with KDB for 'Improvement Plan' Implementation

After Applying for Workout in December Last Year, Debt Restructuring Including Stock Reduction, Debt-to-Equity Swap, and Perpetual Bond Conversion in June
Corporate Normalization Process Enters Full Swing...Plan to Lift Stock Trading Suspension in Second Half

On the 11th, the fate of Taeyoung Construction, which applied for a workout (corporate restructuring) after failing to repay real estate project financing (PF) loans worth around 9 trillion won, is being decided, creating tension at Taeyoung Construction in Yeongdeungpo-gu, Seoul. Photo by Jo Yongjun jun21@

Taeyoung Construction signed a Memorandum of Understanding (MOU) for the implementation of a corporate improvement plan with the Korea Development Bank, the main creditor bank of the financial creditors' council, on the 30th. After a three-month due diligence process following the workout (corporate financial restructuring) application at the end of December last year, the implementation of the corporate improvement plan has entered the main track for corporate normalization.

According to the Korea Development Bank and Taeyoung Construction, following the signing of this corporate improvement plan implementation agreement, debt restructuring procedures such as debt-to-equity swaps, interest rate adjustments, and conversion of loans from the holding company into new capital securities will be actively executed starting from the 31st.

At the end of April, the creditors' group resolved at the 3rd creditors' council meeting a financial structure improvement plan for Taeyoung Construction, which includes capital increase measures such as a 100-to-1 reverse stock split of major shareholders including TY Holdings, full debt-to-equity conversion of loans before the TY Holdings workout, full conversion of loans after the TY Holdings workout into perpetual bonds, and 50% debt-to-equity conversion of unsecured financial creditors, as well as deferral of remaining debt repayment and interest adjustments. An agreement was signed to implement this approved corporate improvement plan.

The implementation agreement period for Taeyoung Construction is until May 30, 2027, and the financial creditors' council may shorten or extend this period if deemed necessary. During the agreement period, the company will carry out the corporate improvement plan, self-help measures, and management goals, and will undergo regular implementation inspections and management evaluations by the creditors.

Taeyoung Construction will first strengthen capital and restructure its financial structure through stock reduction and debt-to-equity and perpetual bond conversions of main creditors within June. Then, in the second half of this year, it plans to resolve the reasons for delisting and lift the suspension of stock trading through a re-audit of the 2023 financial statements, which previously received a refusal of audit opinion, and review by the stock exchange.

A Taeyoung Construction official stated, “We will faithfully implement the corporate improvement plan and achieve management goals to promptly restore stable financial soundness and realize corporate normalization.”

On the 10th, the creditor meeting of Taeyoung Construction is held at the headquarters of the Korea Development Bank in Yeouido, Seoul. Photo by Younghan Heo younghan@

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