The South Korean government said Thursday that it will seek to normalize the business of Taeyoung Engineering and Construction, which applied for a debt-restructuring program on the same day, under the premise of the construction firm’s intense self-rescue efforts.

Earlier in the day, Taeyoung E&C, the 16th-largest builder in the country in terms of construction capacity, applied for a debt workout with its main lender, the state-owned Korea Development Bank.

The company has been suffering from a liquidity shortage due to real estate project financing loans amid a slowdown in the country’s property market.

As of the end of September, its debts were estimated at 1.9 trillion won ($1.47 billion) with a debt-equity ratio of 479 percent.

In response, the government held an emergency meeting Thursday with related ministries and financial regulators to discuss measures to carry out the workout process smoothly and minimize the overall industrywide impact.

“The government has thoroughly monitored the situation so far,” a ranking official from the presidential office told reporters after the meeting. “We will make all-out efforts to control risks and stabilize the market.”

“Some builders are suffering from financial difficulties but banks have been well-prepared due to high interest rates. Even when more builders file for debt-workout programs, we could reduce both economic and social costs,” he added.

Financial authorities, in particular, predicted a limited impact to the nation’s financial market but vowed to prevent adverse effects across industries.

“If we carefully manage risk factors, we will be able to wisely overcome instability in the real estate project financing and construction industries," said Kim Joo-hyun, chairman of the Financial Services Commission, during a press conference after the meeting. “Taeyoung E&C’s application for a debt workout is understood as part of its efforts to minimize the negative impact on the prospective tenants and suppliers of the company.”

Kim sought to reassure the public that the firm's financial difficulties were due to problems specific to Taeyoung E&C, such as a high ratio of debt to equity and excessive project financing loans, and not indicative of an industrywide problem.

"We will guide Taeyoung E&C's thorough self-rescue efforts and support it in reaching an amicable agreement and persuasion with its creditors and gaining the trust and cooperation of market participants,” Kim said.

"We are confident that the current unrest will be resolved and a soft landing will be possible based on the size of our economy and our crisis management capabilities."

Upon its workout filing, Taeyoung E&C also submitted self-rescue plans, including plans to sell off subsidiaries and other company assets.

The builder has made efforts to secure cash worth more than 1 trillion won by selling off its logistics unit, Taeyoung Industry, and taking collateral loans with golf courses it owns.

More discussions are expected to be made with creditors on sales of other lucrative assets, including its stakes in broadcaster SBS.

Under the workout program, creditors’ rights to claim debt payments are suspended, but commercial bonds issued to contractors can be paid.

Taeyoung E&C has already agreed to pay back commercial bonds worth 148.5 billion won maturing Friday.

As of September, the builder is involved in a total of 60 project financing projects. Based on their performances, the projects are set to be carried out or canceled.

Measures to protect contractors and suppliers will also be implemented.

Taeyoung E&C has 22 ongoing residential housing projects totaling 19,869 units. At these sites, the government will support tenants to move in by allowing Taeyoung E&C to continue construction or replace the company if necessary.

A total of 1,096 contracts have been signed between the builder and 581 contractors, official data showed. Of them, 1,057 or 96 percent, are eligible for compensation claims.

Contractors whose sales depend more than 30 percent on Taeyoung E&C will be prioritized for getting financial support, including loan extension and tax cuts.