Provided by Dayou Winia
Dayou Winia Group’s affiliates, which have experienced management difficulties and large-scale wage arrears, are placed under court receivership.
Winia (formerly Winia Dimchae), an affiliate of Daeyu Winia Group, which applied to the court to initiate rehabilitation procedures due to management difficulties, announced on the 5th that it had defaulted on maturity notes issued by the company worth 3.62574 billion won.
Winia, an electronics company that releases air conditioners, kitchen appliances, and household appliances, is widely known for its kimchi refrigerator ‘Dimchae’ brand. Winia’s consolidated operating loss in the first half of this year was 69.5 billion won, an increase from the same period last year (operating loss 43.7 billion won). As of the end of the first half of the year, the capital erosion rate was 374%.
Winia said, “Payment was not made as debt extension and repayment could not be made due to the Seoul Bankruptcy Court’s decision on property preservation and comprehensive injunction,” and stated that the bill was dishonored due to payment restrictions under related laws.
Winia explained that this bankruptcy is effective until the decision to initiate rehabilitation procedures and does not fall under the grounds for a transaction suspension due to final bankruptcy. Winia responded as follows after receiving a request from the Korea Exchange the previous day for an inquiry and disclosure regarding the bankruptcy theory.
Winia applied to the Seoul Rehabilitation Court on the 4th to initiate rehabilitation procedures for the purpose of normalizing management and preserving its value as a going concern in the future. Corporate rehabilitation is a corporate restructuring process conducted under the supervision of the court.
Previously, Winia Electronics (formerly Winia Daewoo), which is also affiliated with Daeyu Winia Group, and Daeyu Plus, a telecommunications equipment company, also applied to the court to initiate rehabilitation procedures last month.
Winia Electronics (formerly Daewoo Electronics), a home appliance company, saw its business situation rapidly deteriorate as its Chinese factories were shut down due to the COVID-19 outbreak. Operating loss, which was 4.5 billion won in 2019, increased to 17.5 billion won in 2021, and last year, financial statements were not disclosed due to an audit opinion being rejected.
Due to severe management difficulties, salaries have not been paid properly since July of last year. Ultimately, Park Hyun-cheol, CEO of Winia Electronics, was arrested by the prosecution last month on charges of non-payment of approximately 30.2 billion won in wages and severance pay to 412 workers. Regarding the non-payment of wages, Winia Electronics announced last month that it would try to resolve the issue through the sale of its Mexican factory worth 300 billion won and rehabilitation procedures.
Daeyu Plus is required to repay early the bonds with warrants (BW) issued in March, but non-payment occurred due to insufficient funds to fulfill the debt. The unpaid amount is a total of 29.6 billion won, including 28.6 billion won in principal and 1 billion won in interest. Dayou Plus is a highly important company within the group as it holds shares in major affiliates such as Donggang Holdings (13.18% stake) and Dayyu Holdings (9.97%).
There are also concerns that the risk of bankruptcy will spread to all affiliates as financing conditions worsen due to a credit rating downgrade following the application for rehabilitation procedures. Recently, domestic credit rating agencies successively downgraded the corporate bond credit ratings of Daeyu Winia Group affiliates that applied for rehabilitation procedures. Korea Ratings downgraded Dayou Plus’ credit rating from ‘BB-‘ to ‘D’. Nice Credit Rating lowered Winia’s credit rating from ‘BB-‘ to ‘B-‘.
As the credit risk across the affiliates increased, the credit ratings of other affiliates of Dayou Winia Group also went down one after another. Korea Ratings downgraded the credit ratings of Dayu ATech, Dayu AP, and Dayu EP from ‘BB-‘ to ‘B-‘, respectively, and Korea Credit Rating downgraded Dayu Atech’s credit rating from ‘BB-‘ to ‘B-‘. .
2023-10-05 10:26:00
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