Court Likely to Decide on Approval of Rehabilitation
Daeheung Construction, a mid-sized construction company ranked 96th in construction capability assessment, has entered rehabilitation proceedings.
On April 18, the First Division for Rehabilitation at the Seoul Rehabilitation Court (Presiding Judge Jung Junyoung, Chief Judge Choi Mibok) decided to commence rehabilitation proceedings for Daeheung Construction. The company had filed for rehabilitation on April 9.
The court explained that Daeheung Construction's liquidity had deteriorated due to several factors: a sharp rise in raw material prices and labor costs after the COVID-19 pandemic, which led to a decline in profitability; a decrease in demand caused by the downturn in the real estate market; an increased burden of principal and interest payments on loans from financial institutions; and the assumption of debt resulting from delays in the completion of major project sites.
The deadline for submitting the rehabilitation plan is September 4. After reviewing the plan, the court will decide whether to approve the rehabilitation. If the court determines that rehabilitation is not feasible, the company will proceed to bankruptcy.
Since the court has not appointed an administrator, the current CEO is considered the administrator.
With the commencement of rehabilitation proceedings, Daeheung Construction is required to submit a list of creditors by May 8. The period for creditors to file their claims is until May 29.
Samjong KPMG will serve as the examiner to determine whether the company is worth preserving.
Daeheung Construction, established in June 1994, is a mid-sized construction company that ranked 96th nationwide (1st in North Chungcheong Province) in the construction capability assessment by the Ministry of Land, Infrastructure and Transport last year.
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