Prime Minister Han Duck-soo Calls for Comprehensive Self-Rescue Plan from Taeyoung Amid Financial Crisis

SEOUL: In a significant move addressing the financial challenges faced by Taeyoung Engineering and Construction Co., Prime Minister Han Duck-soo has called for the company to devise a more extensive self-rescue plan. This comes as Taeyoung, a major South Korean builder, faces a severe cash crunch.

According to Yonhap News Agency, Taeyoung, ranked as the 16th-largest builder in South Korea by construction capacity, sought a debt restructuring program last month due to liquidity shortages linked to real estate project financing (PF) loans. The company’s initial self-rescue plan, unveiled last Wednesday by founder Yoon Se-young, was deemed insufficient by creditors, including the state-run Korea Development Bank (KDB). They have requested additional measures by the end of the weekend.

In an interview with KBS, a public broadcaster, Han emphasized the need for Taeyoung’s management to convince creditors and the public of the company’s efforts to resolve the crisis. He remarked on the government’s ongoing monitoring of risks associated with real estate project financing (PF) loans since last year.

A TY Holdings official, the holding company of Taeyoung Group, informed Yonhap News Agency that while the company is considering its options, it is unlikely to propose additional measures before the deadline. “We don’t have many options, but we are grappling to find measures to dispel concerns of the government and creditors,” said the official.

In response to the unfolding crisis, the finance ministry has announced plans to expand its liquidity program to minimize Taeyoung’s debt crisis’s potential impact on the financial market and the broader economy. The government currently operates a financial stabilization tool worth 85 trillion won (approximately US$65.96 billion).

As of September last year, Taeyoung’s debts were estimated at around 1.9 trillion won, with a debt-equity ratio of 479 percent, highlighting the severity of its financial distress.