Ssangyong Engineering on brink of going bust

Ssangyong Engineering & Construction, a Korean builder, plans to file for a debt workout this week to combat its cash shortages, industrial sources said yesterday.

The application, expected this week, was attributed to the builder’s cash shortages due to net losses for the second consecutive year in 2012, the sources said.

The company posted a net loss of 411.4 billion ($378.5 million) won last year, after reporting a net loss of 157 billion won in 2011.

Ssangyong E&C, a former construction arm of the now-defunct Ssangyong Group, was released from a creditor-led debt workout program in 2004, nearly six years after the program started.

The builder is at risk of being delisted from the Seoul bourse. The Korea Exchange, the local stock market operator, suspended trading of the builder’s shares earlier this month, a process that could result in delisting unless the builder emerges from its capital erosion.

Ssangyong E&C could face bankruptcy later this month unless it pays back maturing debts worth 60 billion won.

During the debt workout program, Ssangyong Engineering & Construction plans to take measures including capital reductions and debt-to-equity swaps to get the company back on its feet, the sources said.Yonhap