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Builders to face massive maturing debts in March, April: data
By 정주원Published : Feb. 12, 2014 - 11:27
Financially troubled South Korean construction firms are expected to refinance a large sum of debts due in March and April, industry data showed on Wednesday, raising concerns that their already shaky footing could further worsen.
According to the data, a total of 5.23 trillion won ($4.9 billion) in debts sold by 24 local construction companies are due this year, around 2.04 trillion won, or 39 percent, of which are scheduled to mature in March and April.
The data showed that 11 builders have to refinance 783 billion won worth of debts due in March with eight construction firms facing 1.26 trillion won worth of maturing debts in April.
POSCO Engineering & Construction Co., a unit of the country's top steelmaker POSCO, has to pay off the largest amount of maturing debts totaling 409 billion won next month, followed by Lotte Engineering & Construction Co. with 370 billion won, Samsung C&T
Corp. with 300 billion won and Hanwha Engineering & Construction Co. with 280 billion won.
The dates are approaching when they are struggling with falling earnings. A slew of major construction firms have shocked investors by reporting worse-than-expected bottom lines.
Daewoo Engineering & Construction Co., one of the country's major builders, suffered an operating loss of 445 billion won during the fourth quarter of last year on money-losing overseas and local development projects.
Samsung C&T reported an operating income of 126 billion won during the October-December period, a sharp drop of 38.9 percent from a year earlier.
Local builders also have been facing harder times in raising money as investors shunned debts sold by them due to their weak financial status and an industry-wide slump, stoking fear that some ailing companies may not be able to make repayments.
"Investors are worrying about builders' poor earnings, which will keep investors away from them," said Kim Ik-sang, an analyst at HI Investment & Securities. "Such bad situations will make it hard for low-rated builders to raise money."
Construction companies are seeking to sell their assets to improve their financial status and pay back maturing debts. For one, GS Engineering & Construction Co., which suffered an operating loss of 937 billion won and a loss of 772 billion won last year, is planning to sell its stake in a hotel in downtown Seoul to secure liquidity. (Yonhap)
According to the data, a total of 5.23 trillion won ($4.9 billion) in debts sold by 24 local construction companies are due this year, around 2.04 trillion won, or 39 percent, of which are scheduled to mature in March and April.
The data showed that 11 builders have to refinance 783 billion won worth of debts due in March with eight construction firms facing 1.26 trillion won worth of maturing debts in April.
POSCO Engineering & Construction Co., a unit of the country's top steelmaker POSCO, has to pay off the largest amount of maturing debts totaling 409 billion won next month, followed by Lotte Engineering & Construction Co. with 370 billion won, Samsung C&T
Corp. with 300 billion won and Hanwha Engineering & Construction Co. with 280 billion won.
The dates are approaching when they are struggling with falling earnings. A slew of major construction firms have shocked investors by reporting worse-than-expected bottom lines.
Daewoo Engineering & Construction Co., one of the country's major builders, suffered an operating loss of 445 billion won during the fourth quarter of last year on money-losing overseas and local development projects.
Samsung C&T reported an operating income of 126 billion won during the October-December period, a sharp drop of 38.9 percent from a year earlier.
Local builders also have been facing harder times in raising money as investors shunned debts sold by them due to their weak financial status and an industry-wide slump, stoking fear that some ailing companies may not be able to make repayments.
"Investors are worrying about builders' poor earnings, which will keep investors away from them," said Kim Ik-sang, an analyst at HI Investment & Securities. "Such bad situations will make it hard for low-rated builders to raise money."
Construction companies are seeking to sell their assets to improve their financial status and pay back maturing debts. For one, GS Engineering & Construction Co., which suffered an operating loss of 937 billion won and a loss of 772 billion won last year, is planning to sell its stake in a hotel in downtown Seoul to secure liquidity. (Yonhap)
