Creditors of Taeyoung Engineering & Construction Co. were set to begin due diligence of the troubled builder as they voted to move forward with a debt restructuring program for Taeyoung, an industry source said Sunday.

An accounting firm will be commissioned this week to carry out due diligence on the financial health of Taeyoung, the source said on the condition of anonymity.

Taeyoung, the 16th-largest builder in South Korea in terms of construction capacity, applied for a debt restructuring program late last month due to a liquidity shortage over real estate project financing loans.

As creditors agreed to allow Taeyoung to postpone the repayment of its debts until April 11, the builder still must secure its own operating funds, including labor and construction costs, which are estimated to exceed 500 billion won ($379.8 million), before a final restructuring plan can be confirmed.

A group of creditors called for Taeyoung to make "bone-crushing" efforts to smoothly carry out the debt restructuring program.

Taeyoung has been suffering from a liquidity shortage amid high interest rates and a slumping property market, and its outstanding PF loans stand at 3.2 trillion won.

Real estate PF loans have emerged as a major risk factor for the country's financial sector and the overall economy. The government has vowed to expand liquidity supply programs from the current level of 85 trillion won if needed. (Yonhap)