Daejeon Construction has filed for court receivership. The company is the second-largest construction firm in the Gyeongnam region and ranks 103rd in construction capability assessment.
According to the construction industry on the 17th, Daejeon Construction filed for court receivership (corporate rehabilitation process) at the Busan Bankruptcy Court the day before. Founded in 1948, Daejeon Construction is a construction firm based in Gimhae, Gyeongnam. Due to the recent downturn in the construction market and a sharp rise in construction costs resulting in mounting receivables, its liability ratio and dependence on borrowing funds increased, leading to a net loss of 9.7 billion won in 2023.
A Daejeon Construction official noted, "The company faced management difficulties due to not receiving the construction payments properly from the developers at business sites for office and knowledge industry centers, prompting the application for court receivership."
Earlier, on the 6th, Shin Dong-A Construction, a mid-sized construction firm ranked 58th in construction capability assessment, submitted a petition for the initiation of the corporate rehabilitation process to the Seoul Bankruptcy Court. The company faced worsening cash liquidity due to rising construction costs and increased receivables, and ultimately could not cover a 6 billion won bill maturing in December of last year, leading to the court receivership application.
Shin Dong-A Construction reportedly could not meet this bill due to the impact of receivables from the development project in the Magok area of Gangseo-gu, Seoul, and Daejeon Construction also participated as a contractor at the same business site.
An industry representative said, "Unlike the metropolitan area, where the population is increasing and demands for infrastructure such as dwellings and roads are rising, regions like Daegu, Gyeongbuk, Busan, and Gyeongnam are experiencing a declining population, making it an environment where new housing and civil engineering projects cannot be conducted. Construction firms that have centered their operations in these regions are facing very difficult situations."