Taeyoung E&C stocks face trading suspension

[Photo by Yonhap]

Taeyoung Engineering & Construction (E&C) Co., Taeyoung Group’s construction subsidiary that has been put under a debt restructuring program over the past few months, said its stocks will be suspended from trading on the securities market starting Thursday due to the company‘s capital impairment.

Officials from the Korea Development Bank and other creditors said on Wednesday that Taeyoung E&C’s deficit, which stems from the failure of real estate project financing (PF), has ballooned, leading the company to face its debt as well as crippling its ability to sustain the business. While the builder‘s assets stood at 1.01 trillion won ($772 million) by the end of 2022, the company ended up having a negative net worth of 562.6 billion won by the end of 2023, primarily due to contingent liabilities and impaired assets.

“Substantial losses were incurred by reclassifying guarantee liabilities for PF projects, previously deemed contingent liabilities, as primary liabilities and recognizing losses on portions of PF project-related assets are expected to be unrecoverable,” the company’s statement said.

Creditors said the trading suspension was a consequence that could occur during the restructuring program but will not affect the process itself.