Samjeong Corporation and E&C Apply for Corporate Rehabilitation
Due to the fire at the Banyan Tree Hotel in Busan, the construction company Samjeong Corporation and Samjeong E&C have filed for corporate rehabilitation in court. As the victim compensation procedures are currently underway, concerns are growing about whether victim compensation and support can be carried out smoothly as the construction company enters the corporate rehabilitation process.
As a result, the opening of the Banyan Tree Hotel, scheduled for May, has been postponed indefinitely. It is a time to pay attention to how the situation will unfold moving forward.
On the 27th, Samjeong Corporation applied for corporate rehabilitation at the Busan Rehabilitation Court. Due to the recent recession in the construction market and rising prices, Samjeong Corporation and Samjeong E&C are facing a serious liquidity crisis, generating over 250 billion KRW in unrecovered receivables.
In particular, the fire at the Banyan Tree Hotel construction site on the 14th has made the recovery of remaining construction cost receivables uncertain, becoming a major cause of management deterioration.
The company stated, "The additional financing from financial institutions has come to a complete halt, exacerbating the management difficulties." This situation is expected to have a significant impact on the future management of Samjeong Corporation.
The Status of Samjeong Corporation and Samjeong E&C in the Busan Construction Industry
Founded in 1985, Samjeong Corporation ranked 8th in Busan and 114th nationwide with a construction capability evaluation amount of 235.7 billion KRW last year. The company's apartment brand 'Samjeong Green Core' has supplied approximately 35,000 units across Busan, Daegu, and the metropolitan area, gaining high recognition.
Additionally, Samjeong E&C is a mid-sized construction company ranked 9th in Busan and 122nd nationwide, holding a significant stake in Samjeong Corporation. The company's representative is Park Sang-cheon, the eldest son of Park Jeong-oh, the chairman of Samjeong Corporation. Against this backdrop, Samjeong Corporation and its affiliates continue to grow and develop.
A large fire occurred at a construction site managed by a mid-sized construction company in Busan. However, Samjeong Corporation was slow in responding, only releasing an official statement a week after the incident.
A representative from the Busan Economic Justice Network emphasized, "As a company rooted in the local community, it should have shown a more responsible attitude." Such remarks remind us once again of the corporate responsibility to the local community.
Application for Corporate Rehabilitation and Concerns over Victim Compensation
The bereaved families are strongly demanding the clarification of the facts, punishment of those responsible, establishment of measures to prevent recurrence, victim compensation, and support for the bereaved families. These demands are crucial for healing the wounds of the victims and preventing similar incidents from occurring.
However, with the construction company applying for corporate rehabilitation, concerns are growing about whether the procedures for compensating victims can proceed smoothly. Samjeong Corporation stated, "Due to the Banyan Tree fire incident, the recovery of over 100 billion KRW in remaining construction cost receivables has become uncertain, and additional financing from financial institutions has become difficult, further exacerbating management difficulties."
They plan to improve their financial structure and normalize operations through the rehabilitation process to minimize the impact on creditors. In this context, attention is focused on how victim compensation will be carried out.
Samjeong Corporation and Samjeong E&C extended their deep condolences to those who perished in the Banyan Tree fire incident. They stated that they will do their utmost to provide appropriate compensation and support to the victims and their families, separate from the rehabilitation process.
Local Financial Sector on Alert, BNK Financial Group's Loan Exceeds 100 Billion KRW
This incident has put the local financial sector on high alert. Three subsidiaries of BNK Financial Group have invested in the Banyan Tree project financing (PF). Among them, Busan Bank has invested 20 billion KRW, BNK Capital has invested 20 billion KRW, and BNK Investment Securities has contributed 15 billion KRW, totaling about 55 billion KRW.
Additionally, the total value of loans provided by BNK to Samjeong Corporation exceeds 100 billion KRW, and losses for the financial sector are expected to be inevitable due to the corporate rehabilitation application.
In light of this situation, BNK Financial Group is convening an emergency meeting to discuss future response measures. A prompt response is necessary to ensure the stability of the local financial sector.
Impact on the Busan Construction Industry and Financial Sector
The filing for corporate rehabilitation by Samjeong Corporation and Samjeong E&C is expected to greatly impact the local construction industry and financial sector. As the recession in the construction industry continues, the risk of a chain bankruptcy among other local construction companies is gradually increasing. As a result, losses in the financial sector are also expected to deepen.
There is growing interest in how this situation will affect the construction industry in Busan and nationwide in the future, as well as whether victim compensation will be carried out smoothly. This situation warrants close attention.
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