Ssangyong Engineering & Construction narrowly escaped total capital impairment status but should improve its financial condition by the end of the second quarter to avoid shutdown by the local stock market, company officials said Tuesday.
The troubled builder said through a public announcement on Monday that it submitted a report to the nation’s stock trader Korea Exchange, proving that it was bailed out of its capital impairment.
Boosted by the creditors’ debt-to-equity swap program, the company’s total capital soared from minus 127 billion won to 22.7 billion won ($18.6 million) and its capital impairment ratio from 186 percent to 84.7 percent.
Ssangyong E&C plans to decide on a second round of capital reduction in its May 2 shareholders’ meeting, in which creditors may agree to reduce the capital level by 50 to 1, officials said.
Though the builder weathered its initial crisis, if it is yet to improve its financial statements by June, the company will be delisted if its capital remains impaired by 50 percent or more for two consecutive quarters. It will also have to submit another quarterly report by the end of August to hold its position in the market.
The company’s creditors are thus to conduct a general inspection and to establish a normalization plan by April 14, officials said.
The nation’s 13th-largest builder, hit by the extended slump of the local construction market and its years-long failure to find a new owner, has long been struggling in a liquidity crunch.
Last month, it filed for a debt workout program, requesting a payment deferment or partial debt relief from its creditor banks, in exchange for amending its financial and employment structure. Its credit rating, too, was downgraded from B- to CCC.
While seeking to survive in the local stock market, Ssangyong E&C is also striving to safeguard its relatively thriving overseas business.
The company achieved a total profit of 184.3 billion won in overseas markets over the past three years, one of its more representative projects being the completion of Singapore’s landmark Marina Bay Sands Hotel in 2010.
By Bae Hyun-jung (
tellme@heraldcorp.com)
