Sky I&D Abandons Acquisition Amid Construction Market Slump
Five Construction Firms Enter Court Receivership Procedures This Year
Mid-sized construction company Daewoo Shipbuilding & Marine Engineering Construction is reported to have filed for corporate rehabilitation (court receivership). As the construction market downturn prolongs, small and mid-sized construction companies are struggling.
According to the construction industry on the 28th, Daewoo Shipbuilding & Marine Engineering Construction filed for court receivership at the Suwon Rehabilitation Court on the previous day (27th). Daewoo Shipbuilding & Marine Engineering Construction had also filed for court receivership in 2022 due to deteriorating financial conditions and received a court receivership commencement decision in February 2023. At that time, the management difficulties were triggered by former Chairman Kim Yong-bin's embezzlement charges and wage arrears issues.
Kim Yong-bin, former chairman of Daewoo Shipbuilding & Marine Engineering Construction. Photo by Yonhap News
Since then, in the second half of 2023, Daewoo Shipbuilding & Marine Engineering was acquired by real estate developer Sky I&D, and the Seoul Rehabilitation Court approved Daewoo Shipbuilding & Marine Engineering Construction's rehabilitation plan, proceeding with normalization procedures. However, as the construction market slump continued recently, Sky I&D faced difficulties in securing business funds and ultimately gave up on acquisition and operation. As a result, Daewoo Shipbuilding & Marine Engineering Construction has once again fallen into court receivership.
With this court receivership filing by Daewoo Shipbuilding & Marine Engineering Construction, five construction companies have entered court receivership procedures this year. Previously, Shindong-A Construction, Daejeo Construction, Sambu Construction, and Angang Construction consecutively filed for court receivership. As five mid-sized construction companies experience a chain of insolvencies, concerns about a 'collapse' crisis are growing.
Due to the prolonged downturn in the construction market, even large construction companies are seeking liquidity. The construction industry expects this crisis among construction companies to continue for some time.
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