Bankruptcy Hits Daeju Construction, C& Group
By Yoon Ja-young
Staff Reporter
Daeju Construction and C& Heavy Industries will no longer be able to borrow from creditors and a total of 14 ailing construction companies and shipbuilders will be put under debt restructuring programs, it was announced Tuesday.
The Korea Federation of Banks revealed the information after looking into the financial health of 92 construction companies and 19 small shipbuilders.
Daeju Construction and C& Heavy Industries were rated as ``D,'' signaling they were bankrupt.
Gwangju-based Daeju Construction had been expanding its business portfolio to the cement, finance and shipbuilding sectors. Its housing construction business grew markedly over the past few years, but the pileup of unsold apartments amid the global credit crunch gave the company a serious cash flow problem. It now ranks 52nd in order backlogs.
C& Heavy Industries had filed for the workout program, but was pushed out of the market following the announcement.
``The restructuring plan focuses on helping firms survive, but the nonviable ones should quickly be cleared away,'' said FSS Governor Kim Jong-chang.
Those rated ``C'' are subject to the workout program and are comprised of 11 construction companies ― Keangnam Enterprise, Dongmoon Construction, Lotte Engineering & Machinery, Samneung Construction, Samho International, Woolim Construction, World Construction, Poonglim Industrial, Daedong Construction, Shinil Engineering, and Isu Construction ― and three shipbuilding companies ― Daehan, Jinse and Nokbong.
They will be placed under a bank-initiated debt rescheduling program, implementing plans for survival and putting management back on track. Their construction projects, both local and overseas, will be completed on schedule with the backing of creditors or the government.
The financial regulator has been pushing banks to accelerate the picking off of unhealthy construction and shipbuilding companies, and the supplying of funds to viable firms.