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Biz News Korea(Eng)

Taeyoung E&C’s creditors mull $302 mn in new aid

Collected: 2024.02.16

Distributed: 2024.02.17

Source: Go Direct

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[Photo by Kim Ho-young]

Taeyoung Engineering & Construction Co.’s creditors are considering providing the cash strapped South Korean mid-tier builder with a new guarantee worth 400 billion won ($302.09 million), in addition to the 400 billion won in new funds that were already provided.

According to financial industry sources on Thursday, Taeyoung E&C’s creditors plan to discuss the measure at the upcoming creditors’ meeting scheduled for February 23rd, 2024. Specifically, the Construction Guarantee Cooperative (CG) will provide a new guarantee of 400 billion won, and if necessary, Korea Housing & Urban Guarantee Co. (HUG) will provide sales guarantees, according to the sources.

For a construction company to proceed with construction, guarantees are required for each stage in the order of ordering, contracting, progressing, and completion. Taeyoung E&C’s public construction sites require various guarantees such as contract guarantees, construction performance guarantees, advance payment guarantees, and subcontract payment guarantees, depending on the progress of construction.

Taeyoung E&C has suffered a downgrade of its credit rating since the initiation of its workout (corporate restructuring) process, making it difficult to obtain guarantees. But if the construction cooperative provides a credit guarantee worth 400 billion won, construction on the sites can proceed to the next stage.

By Kim Hee-rae and Yoon Yeon-hae

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