Taeyoung Construction Workout Begins... 96.1% Consent Rate from Creditors

Taeyoung Construction's workout (corporate financial restructuring) has been confirmed with overwhelming approval from the creditors.

KDB Industrial Bank announced on the 12th that, as a result of receiving resolutions on the agenda of the 1st Financial Creditors' Council submitted to financial creditors by midnight on the 11th, the workout was approved with a consent rate of 96.1%.

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

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With all agenda items, including the initiation of the workout, resolved, the Taeyoung Construction Financial Creditors' Council will grant a repayment moratorium on all financial claims until April 11. The moratorium may be extended by one month if the main creditor bank (Industrial Bank) deems it necessary.

The council will also select an external professional institution to conduct due diligence on Taeyoung Construction's assets and liabilities and assess its viability as a going concern. If the due diligence and evaluation recognize the possibility of Taeyoung Construction's normalization and determine that the affiliated companies and Taeyoung Group faithfully implement their self-help plans, the main creditor bank will establish a 'Corporate Improvement Plan' based on the due diligence results, submit it to the council, and proceed with the resolution process.

The Corporate Improvement Plan is expected to include a rigorous self-help plan for Taeyoung Construction and Taeyoung Group under the principle of equitable loss sharing among stakeholders, debt restructuring measures for financial creditors, and plans for new funding procurement.

With the initiation of the workout, the project financing (PF) lenders will form PF lender councils for each project site and consult with Taeyoung Construction to promptly devise handling measures.

Among the projects currently under construction, housing projects that have completed sales or non-residential projects will be thoroughly managed to proceed as originally scheduled, while housing projects still in the sales process will seek ways to increase sales rates and stabilize the projects early.

For projects where construction has not yet started, comprehensive reviews of project feasibility and execution possibilities will be conducted to promptly finalize measures such as early commencement, contractor replacement, or project withdrawal.

The council stated, "To prevent damage to partner companies and buyers in advance and minimize confusion at construction sites, we expect the PF lenders to promptly and reasonably review handling measures for PF projects and smoothly lead the procurement and execution of necessary funds and construction progress."

Additionally, the Industrial Bank will form a fund management team and dispatch it to Taeyoung Construction to manage the company's fund execution. This is to independently and objectively manage the financial relations between Taeyoung Construction and PF projects for the smooth progress of the workout.

The council said, "The decision to initiate the workout is based on trust in the affiliated companies and Taeyoung Group's public commitment to promptly and thoroughly implement their self-help plans and responsibility fulfillment measures," and added, "We strongly urge the affiliated companies and Taeyoung Group to carry out their self-help plans without any setbacks."

The council also stated, "If the affiliated companies and Taeyoung Group implement their self-help plans and responsibility fulfillment measures as planned, support will be provided to enable Taeyoung Construction to normally carry out existing construction, including PF projects," and "We hope that Taeyoung Construction employees and Taeyoung Group will make painstaking efforts to ensure the smooth progress of due diligence and the establishment of the Corporate Improvement Plan, and we request continuous interest and assistance from creditors, partner companies, and all related institutions."

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