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May 27, 2024
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Gov’t calls for ‘swift biz restructuring’ to address real estate PF concerns


SEOUL, Jan. 18 (Yonhap) — Risks of real estate project financing (PF) loans have shown signs of easing, but businesses need to push for a swift restructuring of tardy projects to address market concerns, a senior finance ministry official said Thursday.

First Vice Finance Minister Kim Byoung-hwan made the call amid lingering concerns over corporate insolvency risks after mid-sized builder Taeyoung Engineering & Construction Co. began a debt workout program.

“Despite signs of risks easing surrounding the real estate PF market, the sheer amount of loans remains huge. Greater efforts by the government and relevant industries are crucial for the soft landing,” Kim said during a meeting with officials of a relevant company.

“Companies need to swiftly restructure projects that have not made progress due to rising costs, conflicts among parties concerned and other issues even though they are deemed profitable,” Kim added.

The government will provide necessary liquidity to support such restructuring efforts, while maintaining enhanced market monitoring, according to the official.

Last month, Taeyoung E&C, the 16th-largest builder in South Korea in terms of construction capacity, filed for a debt workout after suffering from a liquidity shortage amid high interest rates and a slumping property market, and won creditors’ support last week to initiate the workout process.

This photo taken Jan. 12, 2024, shows the headquarters of ailing builder Taeyoung Engineering & Construction Co. in Seoul, which has received 96.1 percent of support from creditors to move forward with a debt restructuring program, according to its main creditor, the state-run Korea Development Bank. (Yonhap)

This photo taken Jan. 12, 2024, shows the headquarters of ailing builder Taeyoung Engineering & Construction Co. in Seoul, which has received 96.1 percent of support from creditors to move forward with a debt restructuring program, according to its main creditor, the state-run Korea Development Bank. (Yonhap)

graceoh@yna.co.kr
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