South Korea moves to reassure markets as builder seeks to restructure debt (updated)

Taeyoung Engineering & Construction

28/12/2023 07:23

(Adds share reaction and net profit in paragraphs 6-7)
       SEOUL, Dec 28 (Reuters) - Taeyoung Engineering &
Construction  009410.KS , a mid-sized South Korean builder, said
on Thursday it planned to restructure its debt and authorities
quickly announced they were working to ensure its troubles did
not spill over into financial markets.
    The country's 16th largest builder has 4.58 trillion won
($3.6 billion) in debt including project financing loans, which
is less than 1% of assets held by local financial institutions,
the Financial Services Commission said in a statement.
    "We see limited impact on financial markets as the issue was
already known and as the market situation is stable, but the
government plans to significantly beef up contingency measures
to make sure any negative sentiment doesn't lead to increased
volatility," it said.
    The contingency measures include government loan guarantees
for Taeyoung's project financing loans.
    The country's central bank has hiked interest rates by a
total of 300 basis points since 2021 to contain inflation,
leading to a downturn in the property market.
    Shares in Taeyoung ended down 3.7% on Thursday, bringing
year-to-date losses to 43%.
    The company saw net profit slide by a quarter in 2022 to
49.1 billion won ($38 million).
         
  
     
($1 = 1,287.0700 won)

 (Reporting by Cynthia Kim; Editing by Edwina Gibbs)
 ((Cynthia.Kim@thomsonreuters.com; 822 3704 5655; Reuters
Messaging: cynthia.kim.thomsonreuters.com@reuters.net))