'Workout' Taeyoung Construction Corporate Bonds 6 Billion KRW Formally Defaulted

Taeyoung Construction announced on the 26th that the 6 billion KRW corporate promissory notes issued in November last year were processed as default in the workout (corporate financial restructuring) procedure.

Taeyoung Construction Headquarters, Yeouido, Seoul / Photo by Yongjun Cho jun21@

The company explained, "On the maturity date of the notes, the 23rd, the Korea Securities Depository requested payment from Shinhan Bank, the issuing institution, but the financial claims were frozen due to the workout application, so payment could not be made," adding, "Technically, it was processed as a default."

When the notes were issued in November last year, Taeyoung Construction provided a 6 billion KRW promissory note to KDB Industrial Bank, which then deposited it with the Korea Securities Depository. However, after Taeyoung Construction applied for a workout, the notes were processed as default according to the special registration provisions for defaulted notes. This is not a final default.

Taeyoung Construction stated, "The corporate promissory notes correspond to debt subject to repayment deferral according to the resolution of the 1st Financial Creditors' Meeting, but due to their nature, maturity extension is not possible, so it was inevitably agreed that the acquiring institution, Industrial Bank, and the settlement bank, Shinhan Bank, would process it as default."

They added, "Since corporate promissory notes are not commercial claims, they do not affect the workout process involving creditor banks under the Corporate Restructuring Promotion Act," and "The due diligence process related to the workout is proceeding smoothly."