The rehabilitation process of SAMBU Construction, the 71st ranked mid-sized construction company in terms of construction capability assessment, will commence. Accordingly, SAMBU Construction will enter the rehabilitation process again after 10 years, following 2015.
The Seoul Rehabilitation Court's Rehabilitation Division 3 (Chief Judge Jung Joon-young) decided on the 6th to initiate the rehabilitation process for SAMBU Construction. The court explained that "the recent sharp rise in raw material prices, a downturn in the construction market leading to a surge in unpaid construction payments and lending to the project execution companies, the assumption of project financing (PF) debts due to the contractor's failure to fulfill its responsibility for completion, and a recurring increase in additional project expenses have worsened cash flow liquidity."
The management of SAMBU Construction will continue to operate the company even during the rehabilitation process. This is because the court decided not to appoint a separate manager at the time of making the decision to commence the rehabilitation process. In this case, the current representative is regarded as the manager.
SAMBU Construction must prepare and submit a list of creditors by the 27th. Creditors must file a creditor report with the court by April 17, but if they are included in the list prepared by the company, they do not need to file a separate creditor report.
An audit committee to determine whether the company has value to be maintained will be conducted by Anjin Accounting Corporation. The creditor investigation period is until May 8.
When SAMBU Construction submits a rehabilitation plan, the court, after reviewing it, will decide on the approval of the rehabilitation. The deadline for submitting the rehabilitation plan is until July 17.
Previously, on the 25th of last month, SAMBU Construction applied to the court for rehabilitation. Based on the third quarter of last year, SAMBU Construction recorded an operating loss of 26.8 billion won and sales of 64.3 billion won. SAMBU Construction had also applied for rehabilitation in 2015 due to worsening financial structure and graduated from court management in 2017.