The mid-sized construction firm EE-HWA CONSTRUCTION, ranked 134th in the subcontractor rankings, has filed for corporate rehabilitation (legal management). Due to the construction market slump, bankruptcies of small and mid-sized construction corporations have been ongoing this year.
According to the Financial Supervisory Service's electronic disclosure system on the 2nd, EE-HWA CONSTRUCTION filed for the commencement of rehabilitation procedures at the Seoul Rehabilitation Court the previous day.
EE-HWA CONSTRUCTION noted, "We applied for rehabilitation procedures according to the decision of the board of directors in order to seek management normalization and preserve our value as a going concern," adding, "The Seoul Rehabilitation Court is expected to decide on the commencement of rehabilitation procedures through the review of our filed application and attached documents."
EE-HWA CONSTRUCTION, established in 1956, has built facilities such as the Korean National Police Agency's Mobile Assault Unit Headquarters and Sangmyung University’s comprehensive lecture building. Recently, it has also participated in the construction of Hanmi Global's second Hanmi Tower.
For the last year, the company's operating loss (individual) recorded 41.3 billion won, widening from the previous year's operating loss of 1 billion won. As of the third quarter of last year, EE-HWA CONSTRUCTION's liability ratio increased by 34.82 percentage points to 163.44% compared to the same period the previous year. The company has also delayed submitting evidential materials for external audits and has not finalized its business report.
Not only EE-HWA CONSTRUCTION but also the construction market's recession has led to a series of bankruptcies among small and mid-sized construction corporations this year. Six companies, including Shin Dong-A Construction (ranked 58th in construction capability assessment), Daeeo Construction (103rd), SAMBU Construction (71st), Angang Construction (138th), Daewoo Shipbuilding & Marine Engineering (83rd), and Byucksan Engineering (180th), have applied for corporate rehabilitation in court.