Gov't vows enhanced monitoring of real estate PF market
The headquarters of Taeyoung Engineering & Construction in Seoul is seen in this file photo, Jan. 12. Yonhap
The government vowed Friday to step up the monitoring of the real estate project financing (PF) market amid potential insolvency risks and concerns as Taeyoung Engineering & Construction won support from creditors to start a debt restructuring program.
The midsized builder has received 96.1 percent of support from creditors to proceed with its debt restructuring program, surpassing the required 75 percent, according to the Korea Development Bank, its main creditor.
Following the creditors' decision, Finance Minister Choi Sang-mok held a meeting with Bank of Korea Gov. Rhee Chang-yong and chiefs of financial institutions to discuss the matter.
"The participants agreed that the financial market has been stable since Dec. 28, when Taeyoung filed for a debt workout, and foreign investors also expected limited chances of the risk spilling over into other sectors," the finance ministry said in a release.
"As many remain wary of the overall real estate PF field, however, the government needs to enhance the monitoring of major businesses and make appropriate responses, if needed, in close consultations with the institutions concerned," it added.
The officials also called for carefully managing the Taeyoung issue to ensure that its debt restructuring process should not cause difficulties to its workers, affiliates and buyers of apartments to be built by the troubled builder.
Though Taeyoung has gained needed relief, it still must secure its own operating funds, including labor and construction costs, which are estimated to exceed over 500 billion won ($379.7 million), before a final restructuring plan can be confirmed. (Yonhap)