Founder of ailing builder Taeyoung appeals for help

The founder of Taeyoung Engineering & Construction Co. on Wednesday asked creditors to allow the ailing builder to enter a debt restructuring program to tide over a cash crunch.

Yoon Se-young, founder and honorary chairman of Taeyoung, made the earnest request at a meeting with some 400 creditors, led by the state-run Korea Development Bank (KDB), earlier in the day.

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

If creditors are given “a chance to properly repay the debts, all executives and employees will do their best to save Taeyoung,” Yoon told the meeting.

He blamed the builder’s “overconfidence” in property projects backed by PF loans as the reason for the cash crunch.

Yoon predicted that Taeyoung could post annual sales of some 3 trillion won (US$2.3 billion) over the next three years.

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

During the meeting, Yoon offered details of the builder’s self-rescue plan, but a senior KDB official called the plan insufficient.

Yang Jae-ho, the official at the KDB’s corporate restructuring division, told reporters, “So far, I don’t think it is sufficient to proceed with a workout.” Yang called for Taeyoung to do more in making efforts to help repay debts.