Ailing builder Taeyoung E&C to start debt workout

Taeyoung Engineering & Construction will start a debt restructuring program after receiving high support from creditors on January 11.

A financial authority official said that "96.1 percent of creditors have expressed their support for the start of the debt workout," adding, "The exact details will be announced on the 12th."

The Korea Development Bank, the main creditor bank of Taeyoung E&C, held its first creditors' meeting and asked creditors to send in their opinions via fax and email by midnight. As of 6:30 p.m., the approval rate was high enough to confirm the start of the workout. A debt workout begins only when more than 75 percent of creditors agree. Now that the workout can begin, the creditors will soon select an accounting firm and begin due diligence on the company's assets and liabilities for three months. The debt may increase from what Taeyoung E&C originally submitted to the creditors.

Based on the due diligence, the creditors will prepare a corporate improvement plan that includes measures to deal with PF workplaces, debt adjustment of main and guarantee bonds, liquidity procurement, and business management plans.

Three months later, around April 11, the second creditors’ meeting will be held to vote on a corporate improvement plan. If necessary, the resolution date can be extended for another month, so the date could fall on May 11. When the creditors and Taeyoung E&C sign an agreement to implement the corporate improvement plan, the work to improve the company’s financial structure will begin in earnest.