Mid-sized construction firm Shin Dongah Construction applied for corporate rehabilitation procedures due to rising construction costs and the real estate market slump caused by an economic downturn. This marks the first time in over five years since graduating from workout in November 2019 that the company has filed for legal management.
According to the construction industry on the 6th, Shin Dongah Construction submitted a petition for the commencement of corporate rehabilitation procedures to the Seoul Rehabilitation Court on the morning of that day.
Due to worsening cash liquidity from rising construction costs and increased receivables, and failing to prevent the maturity of bills worth 6 billion won due last December, the company eventually applied for legal management.
Shin Dongah Construction ranked 58th in the domestic construction capability evaluation last year. The company launched new projects under the housing brand "Familie," including "Shin Jinju Station District Familie Piazza" and "Geumdang New Town Familie Ellipse," but faced difficulties in business activities due to the construction market slump and the increase in unsold dwellings.
According to the Financial Supervisory Service, Shin Dongah Construction’s debt ratio was recorded at 428.75% at the end of December 2023. This is nearly 80 percentage points higher compared to the end of 2022 (349.26%).
Previously, Shin Dongah Construction entered a workout (bondholders' corporate financial restructuring) in 2010 after plunging into total capital erosion due to the global financial crisis. Following this, the company succeeded in turning a profit in 2014 through restructuring, which included adjusting management goals, personnel, organization, and wages, and took self-help measures like asset sales, ultimately graduating from workout in November 2019.