Taeyoung chairman offers SBS stakes as collateral

Yoon Se-young, founder and honorary chairman of Taeyoung Group, announces his statement at the headquarters of Taeyoung Engineering & Construction in Seoul, Tuesday. Yonhap

Yoon Se-young, founder and honorary chairman of Taeyoung Group, has pledged to offer key stakes of SBS, a major broadcaster in Korea, and TY Holdings, to salvage the group's debt-ridden construction subsidiary, if necessary.

During a televised press conference held at the headquarters of Taeyoung Engineering & Construction (E&C) on Tuesday, the group chief vowed to diligently implement the self-rescue measures submitted to creditors to regain the trust from creditors and resume the stalled workout negotiations for the construction company.

"The group will make its utmost efforts to revive Taeyoung E&C, while not entirely relying on the support from the creditors. When the efforts fall short, the stakes of TY Holdings — the holding company of Taeyoung Group — and SBS will be put up as a collateral to save Taeyoung E&C. I will demonstrate my commitment through actions, not through words, putting everything on the line," Yoon emphasized during the press conference.

The group chairman expressed his apology for causing deep concerns with the debt restructuring process of the country's 16th largest builder.

"I feel an immense responsibility for causing concerns to the public, government and creditors, while burdening the national economy. I will make every effort to normalize Taeyoung E&C to minimize the damage to the creditors and everyone related to the situation," Yoon said, explaining that the excessive greed of the company on top of the real estate market recession lies at the heart of the problem.

Yoon Se-young, founder and honorary chairman of Taeyoung Group, takes a bow during the press conference at the headquarters of Taeyoung Engineering & Construction in Seoul, Tuesday. Yonhap

Yoon also expressed regrets over controversies the group caused at the early phase of the group's workout application process by not following through with its initial self-rescue plans.

"Although there have been controversies regarding the implementation of some of the measures, the issue has now been addressed by injecting the entirety of the promised money to Taeyoung E&C," Yoon said, referring to the company's additional payment of 89 billion won ($67 million) to Taeyoung E&C on the previous day to keep its original pledge to inject a total of 154.9 billion won to the construction company.

Taeyoung Group initially submitted its four self-rescue measures, including transferring 154.9 billion won ($117 million) from the sale of Taeyoung Industry to Taeyoung E&C, financially assisting Taeyoung E&C through the proceeds from the sale of Ecorbit, offering BlueOne shares as collateral and for eventual sale, and providing Pyeong Taek Silo as collateral.

"The group pledges once again to faithfully implement the remaining self-rescue plans, including the sales of key subsidiaries, including Ecorbit, and the offer of collaterals," Yoon said, stressing additional options will be offered if the already-employed measures turn out to be insufficient.

Whether the workout process will be pursued will be decided in Thursday's voting among the 609 creditors. If 75 percent of the creditors agree to the workout process, the construction company will undertake due diligence over its assets and submit thorough plans to improve the firm's financial soundness.

Korea Development Bank (KDB), the representative of the group of creditors, announced Tuesday afternoon that the creditors are positively evaluating Taeyoung Group's pledges made earlier in the day about its determination to save the construction company and its willingness to stake further in its self-rescue plans.

Financial Supervisory Service (FSS) Governor Lee Bok-hyun, fifth from left, stands next to Korea Development Bank (KDB) Chairman & CEO Kang Seog-hoon, fourth from left, during a meeting with leaders of financial groups in Seoul, Tuesday. Courtesy of FSS

Earlier in the day, Financial Supervisory Service (FSS) Governor Lee Bok-hyun held a meeting with leaders of financial groups in Seoul, reiterating financial authorities' position that it will strictly apply the principle of self-responsibility when it comes to debt restructuring processes of an insolvent company.

"In the restructuring of financially troubled companies, strict adherence to the principle of self-responsibility will be applied, as the process causes damages and pains on the part of various stakeholders of insolvent companies. Therefore, both the debtor and the major shareholder of an insolvent company need to gain trust by presenting robust self-rescue plans," the FSS chief said during the meeting, adding he believe such requests by the government won't be regarded as contrary to market principles or the principles of limited liability for shareholders.

At the same time, Lee vowed that the financial authorities would assume their roles of adjusting complicated interests related to a workout process, to maintain the financial market's stability and soundness.