KDB begins probe into Taeyoung E&C’s assets and liabilities

[Photo by Kim Ho-young]

South Korea’s state-run lender Korea Development Bank (KDB) has officially begun due diligence on the assets and liabilities of the country’s mid-tier builder Taeyoung Engineering & Construction Co., which has entered the workout (corporate restructuring) process. With a financial creditors’ meeting scheduled for April 2024, the key issue will be whether the main creditors of up to 60 project financing (PF) sites can reach a smooth agreement on the troubled company’s improvement plan and the handling of the project sites.

According to sources from the financial sector on Monday, KDB has selected Samil PricewaterhouseCoopers as the accounting firm for the due diligence and officially began the due diligence process. The accounting firm will conduct due diligence on Taeyoung E&C’s assets and liabilities and evaluate its viability, and it was also reported that KDB formed a ‘joint steering committee of main creditors and PF lenders’ with 20 institutions to conduct due diligence on the 60 PF project sites.

How to deal with these sites is at the core of the corporate improvement plan, and the role of the joint steering committee, which is responsible for mediating disputes among stakeholders, is thus expected to become crucial. As 18 of Taeyoung E&C’s 60 PF projects are in the bridge loan stage before the main PF, it is possible that disputes may arise during the due diligence process and KDB responded by reportedly requesting that the PF main creditors come up with a handling plan for each PF project site by mid-February 2024.