2024-01-05 08:15:06
On the 3rd, a briefing session for creditors regarding Taeyoung Construction’s workout application was held at the headquarters of the Korea Development Bank in Seoul. /Photo provided by Korea Development Bank
Korea Development Bank “Recovering trust is the first step toward normalization… Taeyoung Group must immediately provide KRW 89 billion in sales proceeds.” [부동산PF 도미노 위기]
View enlarged image[한국금융신문 김경찬 기자] The Korea Development Bank (Chairman Seok-Hoon Kang Close View Seok-Hoon Kang Articles), the main creditor of Taeyoung Construction, a mid-sized construction company ranked 16th in the construction capability evaluation, said, “Recovering the trust of stakeholders is the first step to normalizing not only Taeyoung Construction but also Taeyoung Group. “We believe that this is the case,” he said, adding, “Taeyoung Group must immediately provide support for the unfulfilled portion of 89 billion won out of the proceeds from the sale of Taeyoung Industries, which was confirmed when applying for a workout.”
Korea Development Bank announced on the 5th that it held a meeting of vice presidents of major banks including Kookmin Bank, Industrial Bank of Korea, Nonghyup Bank, Shinhan Bank, Woori Bank, and Hana Bank in relation to Taeyoung Construction’s workout. The vice presidents in charge of Taeyoung Construction of each bank discussed the responsibilities of affiliates related to Taeyoung Construction’s insolvency, the content and implementation status of the self-rescue plan, and had in-depth discussions on the direction of future workouts.
The creditor bank reaffirmed that Taeyoung Construction’s insolvency was caused by excessive business expansion using excessive leverage, and that in order for Taeyoung Construction to normalize through the workout process, self-rescue efforts by its affiliates and Taeyoung Group are prerequisites. He said he deeply agreed that this should be done.
The creditor bank did not implement the self-rescue plan submitted by the affiliates and Taeyoung Group when applying for a workout, and prioritized resolving TY Holdings’ joint guarantee debt in order to maintain the management rights of the affiliates, and the principles and standards established during the corporate restructuring process. It was seen as a behavior that distorted. Accordingly, they expressed great disappointment and concern at facing a situation where it was difficult to obtain creditors’ consent to initiate a workout.
The creditor bank immediately supports 89 billion won of the unfulfilled portion of the Taeyoung Industry sale proceeds that Taeyoung Group confirmed when applying for a workout, and provides the remaining three self-rescue measures, including the sale of Ecobit and support for the sale proceeds, the provision and sale of Blue One collateral, and the provision of collateral by Pyeongtaek Cyro. He strongly urged that the plan be confirmed and immediately implemented through board resolution.
As a way to raise insufficient funds while applying for a workout, Taeyoung Group ▲provided 154.9 billion won of the proceeds from the sale of Taeyoung Industries to Taeyoung Construction ▲promoted the sale of Ecobit and supported the sale proceeds to Taeyoung Construction ▲provided collateral for and promoted the sale of Blue One’s shares ▲Provision of collateral for 62.5% of Pyeongtaek Cyro shares was submitted and confirmed.
The Korea Development Bank initially requested several times to support Taeyoung Construction with the full 206.2 billion won, excluding taxes, of the proceeds from the sale of Taeyoung Industry, but Taeyoung Group strongly refused, saying that it might not provide 51.3 billion won for Jae-yeon Yoon on the grounds that he had no management responsibility. It was decided to provide 154.9 billion won, which is the amount received from Y Holdings 113.3 billion won and Taeyoung Group Chairman Yoon Seok-min 41.6 billion won.
According to the Korea Development Bank, TI Holdings initially passed a resolution of the board of directors to lend 113.3 billion won to Taeyoung Construction on the 28th of last month, the date of application for Taeyoung Construction’s workout, but it was confirmed that it only lent 40 billion won on the 29th and 25.9 billion won on the 3rd of this month.
In addition, the Korea Development Bank said, “Taeyoung Group is claiming that the entire proceeds of 154.9 billion won from the sale of Taeyoung Industries, including 89 billion won used by TI Holdings on the previous day (4th) to resolve joint debt, has been used for Taeyoung Construction.” “The group’s claim is to distort the funds used for TI Holdings’ joint guarantee debt into supporting Taeyoung Construction for the purpose of maintaining management rights,” he said.
Taeyoung Group countered, saying, “TY Holdings made the repayment directly on behalf of Taeyoung Construction, which had to repay the debt immediately by applying for a workout, to protect individual investors.” In response, the Korea Development Bank said, “This is incorrect information that does not completely understand the basic principles and procedures of the workout,” and added, “As Taeyoung Construction applied for the workout, all financial debts have been suspended (frozen).”
The creditor bank said, “Recovering the trust of numerous stakeholders, including financial creditors, is the first step toward normalizing not only Taeyoung Construction but also Taeyoung Group,” and added, “Affiliates should immediately implement the previously proposed self-rescue plan and Taeyoung Group should immediately implement the previously proposed self-rescue plan.” “We once once more strongly demand that affiliates and Taeyoung Group sincerely present all possible measures to normalize construction,” he said.
He continued, “If the basic prerequisites are not met, the workout cannot begin without securing 75% approval by the 11th, the date of the first council resolution.” He emphasized, “The affiliates and Taeyoung Group are responsible for all economic damage and collapse of social trust that result from the inevitable discontinuation.”
In addition, the creditor bank said, “In order to pursue a workout, the majority shareholder must fulfill its management responsibilities and submit a strong self-rescue plan,” adding, “In particular, the 3-4 month period required to conduct due diligence and prepare a corporate improvement plan is a prerequisite.” “Only when major shareholders are responsible for covering the insufficient funds for the normal operation of the company can creditors agree to initiate a workout and proceed with it,” he said.
Reporter Kim Gyeong-chan [email protected]
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