“Even large construction companies are on the edge” … Real estate Public Funds have exceeded their equity in 9 places.

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At the Taeyoung Construction headquarters in Yeouido, Seoul, where they have entered into a workout after finally obtaining consent from creditors [Reporter Kim Ho-young], ‘Large construction companies that exceeded 100% of their own capital with real estate project financing (PF) loans increased by 2 companies from the previous year to a total of 9 companies. Not only small construction companies struggling with financial difficulties but also large construction companies are facing difficulties due to PF borrowings.’,
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, ‘According to the results of a survey by the CEO Score of Corporate Data Research Institute on the current status of real estate PF-related borrowings among 39 of the top 50 construction companies in terms of construction capability evaluation in 2023, the total loan balance of the 39 companies as of the end of last year was 46.3644 trillion won, which increased by 15.3% compared to the previous year’s 40.2165 trillion won.’,
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, ‘In terms of specific items, the main PF loans (loans for construction and development costs after approval) were the largest at 27.5927 trillion won (59.5%), which is a 21.6% increase from 4.9023 trillion won the previous year. Bridge loans, which are loans for securing initial funds such as land acquisition, increased by 3.8% to 17.2192 trillion won (37.1%) from 623.6 billion won the previous year.’,
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, ‘In particular, 9 construction companies were identified to have real estate PF borrowings exceeding 100% of their total capital, an increase of 2 companies from the previous year. These companies include Taeyoung Construction, which is in a state of capital erosion, as well as KOLON Global (351.7%), Doosan Construction (300.8%), SGC E&C (289.6%), Shinsegae Construction (208.4%), Lotte Construction (204.0%), Ssangyong Construction (192.4%), Geumho Construction (158.8%), and Seohan (129.9%).’,
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, ‘On the other hand, there were a total of 7 construction companies with a borrowing ratio of less than 10% of their total capital, including HJ Engineering (2.2%), Hanwha (2.7%), Hyosung Engineering (3.2%), Doosan Engineering & Construction (3.3%), Gyeryong Construction Industry (5.0%), Samsung C&T (5.9%), and Hoban Construction (8.5%). This was a decrease of 3 companies compared to the end of 2022.’,
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, ‘As of the end of last year, Hyundai Construction had the largest loan balance (9.9067 trillion won), followed by Lotte Construction (5.3891 trillion won), GS Construction (3.3015 trillion won), Taeyoung Construction (2.6920 trillion won), and HDC Hyundai Development Company (2.5302 trillion won).’,
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, ‘The construction company with the highest ratio of bridge loan balance was Hoban Construction (100%), followed by Lotte Construction (88.0%), Shinsegae Construction (88.0%), Jeil Construction (68.3%), and HL D&I HanaRa (58.3%).’,
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, ‘Construction companies with a real estate PF loan balance ratio of 100% included Samsung C&T (2.3640 trillion won), Geumho Construction (746.0 billion won), Doosan Engineering & Construction (353.3 billion won), and 7 other companies. A total of 23 construction companies had a ratio exceeding 50%, including KCC Construction (98.5%, 256.5 billion won).’,
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, ‘As of the end of last year, the construction company with the largest amount of real estate PF loan maturities due this year was Hyundai Construction (7.2790 trillion won), accounting for 73.5% of the total loan balance. This was followed by Lotte Construction with 4.5351 trillion won (84.2%), GS Construction with 2.393 trillion won (61.8%), Daewoo Construction with 1.4233 trillion won (86.6%), and KOLON Global with 1.3642 trillion won (70.0%).’,
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