It has been confirmed that the flagship affiliates of Utop Group, a mid-sized construction company in the Gwangju and South Jeolla region, have entered corporate rehabilitation proceedings (formerly court receivership). Utop Group is a corporation headquartered in Seo District, Gwangju Metropolitan City, with Utop D&C, Utop Construction, and Utop Engineering as affiliates.
As of 2024, Utop Construction ranked 97th in the construction capability evaluation. Utop Engineering, a mid-sized design and supervision firm, has designed and supervised large buildings in major metropolitan cities including Gwangju. Major designed and supervised buildings include Gwangju City Hall, South Jeolla Provincial Government Complex, Daegu Regional Government Complex, Pohang Yeongilman Port International Passenger Terminal, National Asia Culture Center, Gwangju World Cup Stadium, and Kia Champions Field.
According to the legal and construction sectors on the 14th, Utop D&C, Utop Construction, and Utop Engineering, affiliates of Utop Group, filed for corporate rehabilitation proceedings with the Seoul Rehabilitation Court on the 2nd. On the 13th, the 16th Rehabilitation Division of the Seoul Rehabilitation Court (Presiding Judge Won Yong-il) issued a comprehensive injunction against Utop Group affiliates. A comprehensive injunction is a measure that prohibits compulsory execution against rehabilitation claims or rehabilitation security rights by all rehabilitation creditors and rehabilitation secured creditors until a decision to commence rehabilitation proceedings is made.
Utop Group is a mid-sized corporation that has built dwellings, hotels, resorts, and large logistics centers nationwide. It recently sought to diversify its business by strengthening new and renewable energy, hotel, and logistics operations, but it is understood to have been unable to avoid the slump in the construction industry.
Utop Construction, the flagship affiliate, is a well-known builder in the Gwangju and South Jeolla region and earlier this year obtained approval from the Ministry of Trade, Industry and Energy's Electricity Committee for a 2 trillion won Shinan offshore wind power project. However, as it enters court receivership, a considerable ripple effect is expected on the new and renewable energy projects promoted by the Lee Jae-myung administration.
Utop Construction has posted operating losses for two consecutive years. According to the Financial Supervisory Service's electronic disclosure system, Utop Construction last year recorded 275.3 billion won in sales, an operating loss of 900 million won, and a net loss of 5 billion won. It turned to a deficit in 2023, posting an operating loss of 1.7 billion won.
Utop D&C, a construction development affiliate, was recently reported to have been in arrears three times over two years on income-type real estate entrusted returns. The reason was the deterioration of the external business environment. Based on last year's settlement of account, Utop D&C's total assets were 173.4 billion won and total liabilities were 106.7 billion won.
Utop Engineering is a mid-sized construction and supervision firm, known under the brand "Utop Ubless." It is particularly well known for designing Gwangju World Cup Stadium (total floor area 69,459㎡), nicknamed "Guus Hiddink Stadium."
A construction industry official said, "In the provinces rather than in Seoul and the greater capital area, even raising funds is not easy," and added, "With unsold inventory not decreasing, there are sites where construction has been halted in many places."