The government announced a comprehensive plan for the construction industry on the 4th. Taeyoung’s direct borrowings amounted to 1.3 trillion won… Korea Development Bank notifies 400 creditors of the meeting and Taeyoung considers contributing private funds from major shareholders… Some creditors “make a decision after seeing the self-rescue plan”
The direct debt of Taeyoung Construction, which recently applied for a workout (corporate improvement work), was calculated to be around 1.3 trillion won. The real estate project financing (PF) guaranteed debt, which drove Taeyoung Construction into a liquidity crisis, was found to exceed 9.1 trillion won. According to the financial industry on the 1st, KDB Korea Development Bank, Taeyoung Construction’s main creditor bank, recently issued a statement containing this information. Taeyoung Construction sent a notice of convening the first Financial Creditors’ Council to its creditors. According to the notification, Taeyoung Construction’s direct borrowings, including corporate bonds and collateral loans, amounted to 1.3 trillion won and were raised from 80 sources, including banks, securities companies, and asset management companies.
The amount of guarantees provided by construction company Taeyoung Construction for loans received from financial companies by small-scale developers was confirmed to be KRW 9.1819 trillion. Taeyoung Construction provided guarantees at 122 real estate businesses across the country, and the size of the guarantee for the loan for the business facility development project in Magok District, Gangseo-gu, Seoul was the largest at KRW 1.5923 trillion.
It is known that the Korea Development Bank sent a notice to about 400 places, including direct creditors of Taeyoung Construction and PF business loan guarantee creditors. An official from the financial sector said, “Even if you have received a notice, you can only join the creditors’ group if it is confirmed that there are actual bonds. Since there are cases where the real estate PF project is almost finished, the actual number of creditors and debt size of Taeyoung Construction will decrease.” The actual size of creditors related to Taeyoung Construction will be confirmed at the council meeting on the 11th. Taeyoung Construction’s exposure to the financial sector, previously announced by the Financial Services Commission, is KRW 4.58 trillion. In order for the workout to proceed, the consent of 75% of creditors is required in accordance with the Corporate Restructuring Promotion Act (Act on Promotion of Corporate Restructuring). An official from the creditors said, “The intention of Korea Development Bank, the main creditor bank, will be the most important, but we will first look at Taeyoung Construction’s self-rescue plan before making a decision.” Taeyoung Construction is considering the sale of Ecobit, an environmental comprehensive company, along with the contribution of the majority shareholder’s private wealth.
Financial authorities are considering ways to expand the size of the bond stabilization fund (bond fund) to prevent the ‘Taeyoung Construction crisis’ from spreading to the construction industry and financial companies. The plan is to increase the maximum operating size of the bond fund, which is jointly invested by the financial sector to support corporate liquidity, from the current 20 trillion won to 30 trillion won, while also expanding the refinancing support program for corporate bonds issued by construction companies.
Accordingly, the government’s current market stabilization measures of 85 trillion won are likely to increase to 100 trillion won. An official from the financial authorities said, “We are monitoring the financial situation in the market related to Taeyoung Construction every day,” and added, “We will take additional measures depending on the market situation.” In addition, the government plans to announce ‘construction industry comprehensive support measures’ on the 4th to minimize the negative impact of Taeyoung Construction’s workout application on PF workplaces and construction companies.
Reporter Hwang Seong-ho hsh0330@donga.com
2024-01-01 18:00:00
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