TAEYOUNG E&C, which is undergoing corporate restructuring work, has confirmed that it achieved 86.9% of its asset sale target last year. Operating profit and new orders fell short of annual targets. The early graduation from the workout, which the industry had expected, is anticipated to be somewhat delayed.
According to the financial sector on the 14th, the creditors recently completed the evaluation of TAEYOUNG E&C's management goals and self-rescue plan performance from last year and assigned it a B grade (satisfactory).
Overall management improvement has been achieved, but the performance in implementing the management goals and self-rescue plan presented at the beginning of the workout is considered somewhat lacking.
TAEYOUNG E&C entered into a workout in January last year due to a liquidity crisis caused by the fallout from real estate project financing. TAEYOUNG E&C submitted a self-rescue plan to its creditors, which included asset sales, contributions from the owner family, and restructuring.
According to the evaluation results, TAEYOUNG E&C plans to sell 757.8 billion won worth of assets between 2024 and 2026. Last year, it aimed to sell 446.8 billion won in assets but actually sold 388.4 billion won (86.9%). Plans to reduce fixed costs were exceeded; the target for fixed cost reduction last year was 12.5 billion won, but it was reduced by 13.4 billion won (107.2%). TAEYOUNG E&C plans to reduce a total of 52.4 billion won in costs by next year.
In terms of revenue, it recorded 2.49 trillion won, which is 87.6% of last year's target (28.505 trillion won). Operating profit achieved 75.7% (38 billion won) of the original target (5.02 billion won). New orders were set with a goal of 13.652 trillion won but recorded 10.67 trillion won (78.1%). All results, excluding cost reductions, fell short of last year's targets.
However, considering the poor construction market conditions, it is understood that the creditors believe TAEYOUNG E&C is relatively fulfilling its self-rescue plan. The creditors decided to continue the workout process for TAEYOUNG E&C based on this evaluation result.
The creditors evaluate the necessity of continued self-rescue plan implementation and workout at each stage of the workout process. If performance is poor for two years into the workout, warnings, plan revisions, or changes in management will occur. In the third year, decisions regarding graduation, cessation, extension, or sales will be made.