Ssangyong Engineering’s capital erased by net loss

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Ssangyong Engineering’s capital erased by net loss

Ssangyong Engineering & Construction said yesterday that it posted a net loss of 411.4 billion won ($368 million) last year, wiping out its capital.

The net loss more than doubled from 2011’s 157 billion won in losses, as the builder disposed of unsold apartments at discount prices amid the country’s protracted housing market slump.

The loss has impaired the builder’s capital, worth 148.8 billion won as of December, meaning that it cannot pay its debts if it sells its assets.

The Korea Exchange (KRX), the country’s stock market operator, suspended trading of Ssangyong E&C’s shares last Friday, citing the builder’s failure to address speculation of capital erosion.

The KRX asked the builder to officially comment by Friday noon on speculation that the company could be placed in a debt workout program again.

The builder can avoid delisting if it emerges from capital erosion before April 1, according to the sources.

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