More builders reach deals with creditors

Restructuring of local construction companies is gaining momentum, as an increasing number of them are reaching agreements with their creditor banks. Industry officials said six out of the 11 construction companies selected for bank-led restructuring in January have recently signed or plan to sign soon memorandums of understanding with banks on their normalization plans. The remaining five are working on finalizing the plans.
The six companies are: Woolim Construction, Isu Engineering & Construction, World Construction, Shinil Engineering, Poonglim and Woolim Construction.
Poonglim, which is scheduled to sign an MOU with its creditor banks until April 22, has decided on restructuring plan, including cutting the salaries of executives, reducing staff and selling assets. The banks, in return, have agreed to inject 60 billion won ($45 million) into the company at the annual interest of five percent, while extending the maturity of its debts to the end of 2011.
We have cash balance of 5.6 trillion won from the 163 construction sites we are or will be involved in," a Poonglim employee told Yonhap News agency yesterday. "We will finish the workout process as early as possible and repay the cares of our customers, shareholders and partnership companies."
Creditors of Woolim Construction have supplied the company with 63.5 billion won at the annual interest rate of five percent this month, and decided to extend the maturity of its debts to the end of 2013.
Creditors of Samho, one of the 11 construction companies to go through the revamping process, are discussing about extending the maturity of its debts to 2012 or 2013. Keangnam Enterprises plans to finalize its normalization plan until Sunday.
On the other hand, restructuring of three shipyards -- Daehan Shipbuilding, Jinse Shipbuilding and Nokbong Shipbuilding -- in line for the restructuring is being further delayed, as none of them have come out with a normalization plan yet.
The banks also confirmed that they had started looking into 11 out of 15 construction companies and shipyards set to go through restructuring process under the second round of corporate credit evaluation last month.