₩3.2T of project debt met Korea's property slump — first builder workout in a decade

Taeyoung E&C, the construction arm of Korea's 40th-biggest conglomerate and the country's 16th-largest builder by capacity, grew on project finance — short-term borrowing against housing and development projects. By late 2023 it carried ₩3.2 trillion of PF loans and ₩1.9 trillion of total debt at a 479% debt-to-equity ratio, while the underlying business shrank: revenue fell from ₩3.7 trillion in 2018 to ₩2.6 trillion in 2022, and operating income from ₩458 billion to ₩91.5 billion.

With rates high and the property market slumping, about ₩400 billion of PF loans came due by the end of December 2023. On 28 December the company filed for a creditor-led workout — the first by a Korean builder in a decade — and became the test case for whether Korea's ₩134.3 trillion PF market could be contained; industry watchers estimated nearly ₩23 trillion of PF loans could sour. The government pledged 'all possible measures', and founder Yoon Se-young returned to lead the group, promising affiliate sales and personal asset contributions.

On 1 May 2024 creditors, led by Korea Development Bank, approved the plan with the required 75% majority: roughly ₩1 trillion of debt converted to equity to erase the capital impairment, half of unsecured claims swapped for shares, and repayment of the rest deferred three years. Taeyoung targeted stable liquidity by end-2025 — its lenders became its owners, betting their own capital on the same property market that had just broken their borrower.