Workout Rumors... Taeyoung Construction "Not True, Securing Liquidity Through Industry Sale"

Taeyoung Construction has dismissed rumors that it is considering filing for workout, stating that "this is not true."

A Taeyoung Construction official said on the 13th, "The Financial Services Commission recently announced a policy to liquidate insolvent companies according to market logic, which seems to have sparked these rumors," adding, "Our performance in the second and third quarters of this year was strong, and we have secured additional liquidity through the recent sale contract of Taeyoung Industry."

On the same day, rumors spread mainly in the securities industry that Taeyoung Construction's bond creditors were considering filing for a workout, and that the company might immediately enter court receivership (rehabilitation proceedings).

Speculation arose that Taeyoung Construction would utilize the workout system, which is less severe than court receivership, as the Corporate Restructuring Promotion Act (CRPA), the legal basis for the workout system, is set to be implemented in January next year. The CRPA lost its effect on October 16, meaning that currently, companies facing liquidity crises can only choose court receivership. However, the National Assembly's Political Affairs Committee passed an amendment to extend the workout system under the CRPA until 2026 at a plenary session on the 30th of last month, and it was approved by the National Assembly plenary session on the 8th, so it is scheduled to take effect in January next year.

Rumors about Taeyoung Construction's liquidity crisis also surfaced in September. At that time, Taeyoung Construction stated, "We will not tolerate some malicious rumors that are not true and have reported them to the Financial Supervisory Service's joint rumor crackdown team, and we will respond strongly at the group level."

This year, Taeyoung Construction has faced difficulties such as a downgrade in credit rating due to increased financial burdens from PF liquidity risks. The sale of Taeyoung Industry, a prime logistics company located at Ulsan Port, was also pursued for this reason.

Additionally, Taeyoung Construction's PF guarantee amount is higher than that of other construction companies, which is why liquidity crisis rumors have resurfaced. As of the end of November, Taeyoung Construction's project financing (PF) contingent liabilities stand at approximately 2.5 trillion won. The debt ratio based on consolidated financials for the third quarter of this year is 478.7%. Generally, a debt ratio exceeding 200% is considered to indicate poor financial health.