Taeyoung Construction Workout Initiated... Starting Management Normalization (Comprehensive)

Taeyoung Construction's workout (corporate financial restructuring) has been confirmed to commence.

On the 11th, creditor financial institutions including the Korea Development Bank held the '1st Financial Creditors' Meeting' and agreed to initiate the workout for Taeyoung Construction through a vote (written resolution).

The condition for starting the workout is the consent of 75% of creditors (based on the reported claims amount to the Korea Development Bank).

Creditors will express their approval or disapproval via fax or email. Voting will continue until midnight of the day, and the results will be announced on the 12th.

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@

After applying for the workout on the 28th of last month, Taeyoung Construction has been engaged in a tug-of-war with creditors over self-rescue plans. At the last moment, Taeyoung Construction submitted an additional self-rescue plan, accepting the creditors' demands. The Taeyoung Group implemented or pledged to implement the existing four major self-rescue plans, including support for Taeyoung Construction from the proceeds of the sale of Taeyoung Industry, and additionally proposed providing collateral such as SBS Medianet and, in case of liquidity shortage, pledging the major shareholder TY Holdings' shares and TY Holdings' shares in SBS as collateral. Authorities also supported this by suggesting a grace period for the joint debt held by TY Holdings, considering Taeyoung Group's concerns that Taeyoung Construction's workout could escalate into a liquidity crisis for TY Holdings.

With the commencement of the workout, a business and financial restructuring program for Taeyoung Construction will be led by the creditors. The creditors will postpone exercising their claims for up to four months, during which an accounting firm will be selected to conduct due diligence on assets and liabilities. Taeyoung Construction must submit organizational and personnel restructuring plans, financial restructuring, and cost reduction proposals to the main creditor bank.

With the confirmation of the start of Taeyoung Construction's workout, concerns about a domino chain crisis in the construction and financial industries are expected to be partially alleviated.