Taeyoung Engineering & Construction, a South Korean builder facing financial difficulties and undergoing corporate restructuring, has announced on Mar. 13. that it has reached a state of total capital impairment. This means that the company’s liabilities exceed its assets. As a consequence, the company’s shares listed on the securities market will be suspended from trading starting from Mar. 14.
According to Taeyoung E&C’s consolidated financial statements last year revealed on the same day, the company’s total equity (assets and liabilities) stood at -562.6 billion won at the end of last year, and its capital was fully impaired. This result was due to anticipated losses from PF (project financing) projects, as well as additional loss provision liabilities. “The capital impairment is an inevitable process in conjunction with the workout situation, and if a corporate improvement plan is quickly established, we will do our best to raise capital through debt-equity swap and other means to normalize business operations and graduate from the workout as soon as possible,” said Tae Young E&C official.
Due to capital impairment, trading of Taeyoung E&C’s shares will be halted immediately. The Korea Exchange (KRX) will conduct a substantive review of the company’s listing eligibility to determine whether to maintain or delist the listing. If the listing is maintained, trading will resume.
Earlier in the day, Taeyoung E&C disclosed that its revenue last year reached $2.5 billion (3.37 trillion won), up 29 percent from the previous year. Net profit turned into a loss of $1.2 billion (1.58 trillion won), while operating profit was $34 million (45.1 billion won).
