SEOUL, KOREA - Korea's major publicly-listed construction companies are facing an emergency situation by the end of the first half as the sum of commercial paper coming due at the end of June is in excess of 4.5 trillion won. According to the Construction Association of Korea on January 7, the total amount that the construction firms must pay back by the end of June is 4,548.2 billion won.

 

A Construction Association of Korea official said, "This is higher than that for the second half last year when the domestic construction business was at the bottom at 4,107 billion won. As most contractors are under pressure to pay back this year, some of them may face bankruptcy or in dire financial stress."

 

The sum of commercial paper coming due in the second half will be much lower at 1,916.0 billion won, followed by 2,980.0 billion won and 2,110.0 billion won in the first and second half in 2015.

 

The problem, however, is that the companies are having a hard time to raise new money to pay back old debts as their credit ratings are lowered by the protracted recession and declining profitability in overseas projects.