'Construction License No. 1' Sambu Togeon Files for Rehabilitation... Fear of Chain Bankruptcies Among Mid-sized Construction Firms
by Oh Yukyo
Published 25 Feb.2025 10:15(KST)
Updated 25 Feb.2025 10:38(KST)
Samboo Tokon Follows Shindonga and Daejeo into Rehabilitation
Continuous Losses Since 2021... Debt Ratio Soars to 835%
Builder of Gyeongbu Expressway and Subway Line 1 Faces Downfall
This year, applications for rehabilitation procedures (formerly known as court receivership) have been continuing among mid-sized construction companies. Starting with Shindonga Construction (ranked 58th in construction capability evaluation), followed by Daejeo Construction (103rd), Samboo Tokon (71st), which holds the 'Construction Business License No. 1,' also applied for rehabilitation procedures. The fear of a wave of bankruptcies among mid-sized construction companies is becoming a reality.
According to the Financial Supervisory Service's electronic disclosure on the 25th, Samboo Tokon announced that it filed an application for the commencement of rehabilitation procedures at the Seoul Rehabilitation Court the previous day. The reason for the application was "business normalization and preservation of value as a going concern." Additionally, Samboo Tokon stated, "We have filed for property preservation measures and a comprehensive injunction," and "The Seoul Rehabilitation Court is expected to decide whether to commence rehabilitation procedures after reviewing the application and attached documents submitted by our company." Due to the rehabilitation application, trading of Samboo Tokon, a KOSPI-listed company, was suspended.
As of the third quarter of last year, Samboo Tokon's debt ratio reached 835%. Compared to 236% in the third quarter of 2023, it soared more than threefold. Since 2021, the company has recorded operating losses every year, worsening its financial condition. The accumulated sales from January to September 2024 were 268.8 billion KRW, with an operating loss of 67.7 billion KRW during the same period. Last year, the company received a 'disclaimer of opinion' from an accounting firm, leading the Korea Exchange to designate Samboo Tokon as a management item.
Founded in 1948, Samboo Tokon is the company holding the 'Construction Business License No. 1.' It first obtained the domestic construction business license (civil engineering and architecture construction) in 1965. The company participated in the construction of the Gyeongbu Expressway and Subway Line 1. It also constructed Yeouido's first complex high-rise apartment, the Shibeom Apartment.
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