DAEGU — The city of Daegu has activated an emergency response system after Taewang E&C, a mid-sized local builder, filed for corporate rehabilitation, or court receivership, raising concerns about a chain of damage across the construction industry.
According to the city, officials held an emergency meeting of related agencies at the Sangyeok government complex on the afternoon of the 25th to discuss ways to minimize damage to subcontractors following Taewang E&C's receivership filing.
The meeting brought together Taewang E&C, financial institutions including iM Bank, the Financial Supervisory Service and the Korea Credit Guarantee Fund, and the regional construction association.
The city said it is now running its emergency response system to closely monitor the status of public and private construction projects.
Public works underway in Daegu face no major disruption for now.
For the Manchon Station subway connection passage and entrance construction project, one of the major sites Taewang E&C is building, the project developer pays subcontractors directly, limiting concerns about a chain of damage to partner firms.
In the private housing sector, the city confirmed that Taewang E&C has no residential apartment construction sites in Daegu.
The city said it will maintain its response system in line with the progress of the receivership, including the court's preservation order, comprehensive prohibition order and decision to open rehabilitation proceedings, and work to prevent the damage from spreading.
Taewang E&C filed for receivership on the 21st amid worsening liquidity caused by a prolonged property market slump, and entered corporate rehabilitation proceedings on the 24th after submitting a list of creditors.
The company said its assets, worth about 476 billion won ($343 million), exceed its debts of about 250 billion won ($180 million), and that it plans to repay its debts and normalize operations through a swift sale of assets, restructuring and use of a direct-payment system at public sites.
Daegu Mayor Choo Kyung-ho said, "Through close management in coordination with financial institutions and the construction industry, we will focus all of the city's capabilities on preventing problems such as a credit crunch from spreading through the local construction industry."
