Ssangyong Engineering & Construction has averted delisting from the stock market or liquidation after its creditors finally agreed to bail out the debt-saddled builder.
Following the decision of KB Kookmin Bank a day earlier, Shinhan Bank on Thursday approved the proposition to help Ssangyong E&C’s management normalization by launching a debt rescheduling program under creditors’ control.
Hana Bank and the state-run Korea Development Bank also gave the nod to the rescue plan on the same day.
Some research analysts had issued a possibility that the ailing company could face a court receivership and ultimate liquidation after being driven off the main bourse.
They had argued that “too much in bailout funds are needed” under the creditor-led rescheduling program.
Market insiders estimated that some 1.1 trillion won ($1 billion) should be poured into Ssangyong E&C for its management normalization.
Creditors have already provided the company with 370 billion won through their purchase of the company’s insolvent asset-backed commercial paper and support of the debt-for-equity swap deal.
Ssangyong E&C’s net loss amounted to some 400 billion won in 2012, snowballing from 157 billion won a year before.
By Kim Yon-se (
kys@heraldcorp.com)
