The Korea Herald


PM urges cash-strapped Taeyoung to draw up drastic self-rescue plan

By Yonhap

Published : Jan. 7, 2024 - 19:27

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The headquarters of Taeyoung Construction & Engineering in Yeouido, western Seoul (Yonhap) The headquarters of Taeyoung Construction & Engineering in Yeouido, western Seoul (Yonhap)

Prime Minister Han Duck-soo on Sunday urged Taeyoung Engineering & Construction Co. to come up with a more drastic self-rescue plan to tide over its cash crunch.

Taeyoung, the 16th-largest builder in South Korea in terms of construction capacity, applied for a debt restructuring program last month due to a liquidity shortage over real estate project financing loans.

Taeyoung Group founder Yoon Se-young unveiled a self-rescue plan Wednesday, but creditors led by the state-run Korea Development Bank evaluated the measure as insufficient and requested additional measures by the end of the weekend.

In an interview with public broadcaster KBS, Han pressed Taeyoung's management to do more to persuade the creditors and draw public consensus that the company has done enough to overcome the crisis.

Han said the government has been closely monitoring potential risks in real estate project financing loans since last year.

An official at TY Holdings, the holding company of Taeyoung Group, told Yonhap News Agency the company is still deliberating but that it is unlikely to come up with additional measures before the end of the weekend.

"We don't have many options, but we are grappling to find measures to dispel concerns of the government and creditors," the official said.

The finance ministry has announced plans to expand its liquidity program to minimize the potential impact of Taeyoung's debt crisis on the financial market and the wider economy.

Currently, the government operates 85 trillion won ($65.96 billion) as a tool to stabilize the financial market.

As of September last year, Taeyoung's debts were estimated at around 1.9 trillion won, with its debt-equity ratio reaching 479 percent. (Yonhap)