Gwangju and Jeonnam mid-sized construction corporation Youngmu Construction, which ranked 111th in the construction capacity evaluation, is undergoing corporate rehabilitation (court receivership) due to financial difficulties.
On the 28th, according to the investment banking (IB) industry and the legal community, the Gwangju District Court's bankruptcy division announced a comprehensive prohibition order for Youngmu Construction, which applied for court receivership on the 20th.
When the court issues a comprehensive prohibition order, the procedure to freeze company assets begins. This is a measure that prevents recovery of company debts and disposal of its own assets without court permission. Youngmu Construction has already submitted an asset preservation and comprehensive prohibition order application prior to the initiation of the rehabilitation process.
The bankruptcy court will determine whether to initiate the rehabilitation procedure after going through an interrogation process against Youngmu Construction's management. The interrogation date is scheduled for the afternoon of the 25th of next month.
Youngmu Construction, established in 1998, is a local construction corporation based in the Gwangju and Jeonnam region. It entered the multi-family housing business in 2002, leveraging its apartment brand "Youngmu Yedaum," and expanded its business sites nationwide. In the construction capacity evaluation conducted by the Ministry of Land, Infrastructure and Transport last year, it recorded 111th place.
However, it is reported that the management situation has rapidly deteriorated since last year due to rising raw material and labor costs, high interest rates, and unsold apartments. Youngmu Construction recorded sales of 88.5 billion won and operational losses of 6.1 billion won last year, which significantly worsened compared to the sales of 152.9 billion won and operational profit of 16.7 billion won recorded in 2023.