Taewang E&C Co., a mid-sized construction firm based in the Daegu region and ranked 67th in construction capacity assessments, has filed for court receivership.
According to local construction industry sources, the company recently filed a petition with the Daegu Rehabilitation Court to begin corporate rehabilitation proceedings after failing to overcome a temporary liquidity crunch.
Taewang E&C declared an "emergency management" footing in 2023 as the real estate downturn deepened, and has since pursued a series of self-rescue measures to restore normal operations.
Despite those efforts, the company's liquidity burden grew as force-majeure incidents compounded tightening financial markets and a prolonged real estate slump.
A residential project in Sawol-dong, Suseong-gu, suffered heavy losses as project financing conditions deteriorated from 2023 following the Legoland crisis in late 2022, with loan interest rates climbing into double digits amid a severe property market downturn.
The liquidity crisis deepened when trust companies and financial institutions froze the company's liquid assets by establishing pledge rights as collateral.
Taewang E&C said it intends to use the rehabilitation process as an opportunity to pursue a swift return to normal operations under court protection.
The company plans to quickly sell owned and investment assets to raise funds for debt repayment and diligently execute public and government-contracted construction projects to secure a stable revenue base. It will also cut unnecessary costs through aggressive restructuring to improve management efficiency.
To minimize losses for subcontractors, the company said it will actively use a direct-payment system for ongoing public construction sites and pursue stable project execution and phased debt repayment based on its order backlog of about 500 billion won ($361 million).
"We will treat this rehabilitation process as a turning point for restoring normal operations, pursuing the swift liquidation of assets and intensive restructuring," a company official said. "We will do everything possible to accelerate the company's recovery and minimize losses for employees and partner firms."
kbj7653@heraldcorp.com
