By Lee Hyo-sik

Construction firms here, big and small, have been reeling from a sluggish real estate sector after the global financial crisis in late 2008.

Facing unfavorable business conditions at home, large builders have been trying to find a growth engine abroad, aggressively made inroads into the Middle East and other emerging markets to secure orders.

However, small- and medium-sized firms have been unable to do so due to a lack of technical know-how and overseas networks.

They rely mostly on local housing projects and public infrastructure works, which translate into a more severe situation for them than their larger counterparts.

Under snowballing debt, many small- and mid-sized builders have been forced to undergo receivership or creditor-managed workout programs over the past few years. Most of them have been put up for sale, but nobody shows any interest in acquiring them due to a bleak outlook for the real estate market.

``Many mid-sized construction firms that have gone bankrupt under heavy debt, have been looking for new owners,’’ said a researcher at the Construction Economy Research Institute. Of the country’s top 100 builders, 35 are currently under court-ordered receivership or a creditor-managed workout scheme.

``But it has and will not be easy to find companies or investors willing to take over financially-struggling builders unless the property sector rebounds from the current slump,’’ the researcher said.

Worse yet, the majority of companies for sale do not own any advanced technologies, he said, adding they have not secured ample construction orders either.

He projected mergers and acquisitions (M&A) in the construction industry will likely remain depressed for the foreseeable future, suggesting that struggling builders should make all-out efforts to cut costs and win orders to normalize operations.

Shinsung Engineering & Construction, which sells apartments under the brand name Misozium, issued a public notice of sale on May 29. It was the third of its kind since its bankruptcy in 2008. The company was once the country’s 41st largest builder but is now under court management.

``We are seeking to complete the sales process by the end of August. But we know it won’t be easy to achieve this deadline, given the continued property market downturn,’’ a company spokesman said.

Sungwon Corp., which has been under the management of the Suwon District Court, is poised to restart a sales procedure. In April, it found an interested buyer but the sale flopped over a purchase price disagreement.

The builder plans to issue another sales notice as early as August.

Byucsan Engineering & Construction, Korea’s 26th largest builder underwent a creditor-managed workout scheme in 2010 and has been accepting letters of intent from potential buyers since early May without any response yet. Byucsan had built apartments under the brand Blooming.

Namkwang Engineering & Construction and LIG Construction, both under creditor-initiated restructuring programs, are also on the M&A market.