Published : 2014-02-14 14:03
Updated : 2014-02-14 14:35
Ssangyong Engineering and Construction Co., which was placed under court protection early this year, has effectively secured three public work projects worth 107 billion won ($100.8 million), industry sources said Friday.
The sources, who declined to be identified, said the orders issued by the state-run Korea Expressway Corp., and Pohang Regional Maritime Affairs and Port Administration are expected to be finalized next week.
The construction projects include two sections of a highway connecting Miryang, a town in the interior of South Gyeongsang Province, with the major industrial city of Ulsan, and shoreline maintenance work in Uljin County.
"The securing of these public work projects invariably can be seen as reflecting the confidence of these clients in the builder," a construction sector insider said.
The size of the projects is not very big, yet it can help the company -- rated 16th in the country in terms of building capacity -- normalize operations that have been hurt by liquidity shortages.
Ssangyang, like many builders, experienced hard times due to a sharp drop in orders at home and abroad in the wake of the global financial crisis. It applied for court protection after engaging in a debt restructuring program.
The court placed the company under its control so as to give it leeway to deal with its liquidity shortage and even allowed the incumbent CEO to remain in charge.
Related to the latest domestic orders, state financial regulators said earlier in the week that initial concerns that Ssangyong's troubles can adversely affect its ability to fulfill contracts have been largely alleviated.
Industry observers and Ssangyong managers confirmed that while there were some cancellations at the beginning for the building of houses in South Korea, no other disruptions took place in the past month, with none of the 18 overseas projects being undertaken by the company having been canceled.
On concerns that Ssangyong's troubles may spill over into partner companies and suppliers, a study conducted by the builder's creditors showed very few were really hurt.
Of the 79 partner firms and vendors with meaningful amounts of account receivables from Ssangyong, only five are candidates for some sort of corporate restructuring. (Yonhap)