HDC Hyundai Development get temporary reprieve from court order Court orders Seoul city government to halt eight-month business suspension on builder
이 기사는 2022년 04월 18일 08:02 더벨 유료페이지에 표출된 기사입니다.The Seoul Administrative Court on Thursday ordered the Seoul city government to stop a punitive business suspension on South Korean builder HDC Hyundai Development Company over a building demolition disaster that killed nine lives last year, according to legal sources on Thursday. The injunction is effective until 30 days after a court ruling on the main lawsuit.
On March 30, the Seoul city government imposed an eight-month business suspension on HDC Hyundai Development over the deadly collapse of the building at the builder’s construction site in Gwangju, South Jeolla Province in June last year. In response, the company filed the injunction to suspend the punitive order along with a lawsuit to reverse it.
Thanks to the latest court order, HDC Hyundai Development has avoided the risk of immediate early repayment of corporate bonds.
According to a bond contract, an event of default occurs when a supervisory authority imposes a suspension or cancellation of business on a company. HDC Hyundai Development is working hard to persuade investors based on local law firm Kim & Chang’s opinion that the event of default occurs when the business suspension order takes effect.
Investors seem to take a wait-and-see stance to see how the situation will unfold as the company has recently secured a large amount of cash assets.
The court order seems have granted HDC Hyundai Development more than a year until the occurrence of the event of default. It normally took about one to two years for construction companies to actually suspend their businesses following the business suspension order. This is because most of them filed injunction or litigation to stop the order.
The value of HDC Hyundai Development’s corporate bonds that contain the event of default clause due to the business suspension amounted to 690 billion won ($561 million). Of the total, bonds worth 200 billion won will mature this year and bonds worth a combined 170 billion won will mature in July and October of 2023. This means the amount of corporate bonds that must be repaid early due to the event of default triggered by the business suspension could decrease from 690 billion won to some 300 billion won.
Separately, the Seoul city government imposed an additional eight-month business suspension on the company for violating its subcontractor supervision obligations.
According to Article 82-2 of the Framework Act on the Construction Industry, the city government may impose business suspension of less than one year or a penalty surcharge equivalent to up to 30% of the contract price, at most 500 million won, for violation of subcontractor supervision obligations. The company will replace the business suspension order with penalties.
If the additional business suspension order is changed to a penalty surcharge, it won’t trigger the occurrence of the event of default.
HDC Hyundai Development is also facing additional administrative measures in connection with a separate fatal accident that occurred in the same city Gwangju. (Reporting by Ji-hye Lee)
최신뉴스 in 전체기사
- [지속가능경영 리뷰]주인 바뀐 한샘, 1년 만에 지배구조 'B→A'
- 쓱닷컴, '수익성 개선' 물류 효율화 팔 걷었다
- ㈜이마트, 스타벅스·지마켓 'PPA 상각' 수익성 잠식
- [신유통공룡 리포트]푸디스트, '식자재왕도매마트' 온라인·글로벌 투트랙
- [신유통공룡 리포트]'대구 토종' 장보고식자재마트, '온라인+가맹' 전국구 넘본다
- KGC인삼공사, 美·中 일변도 탈피 중동 신시장 노크
- [신유통공룡 리포트]365일 불켜진 식자재마트, '유통법' 틈새 중견기업 급성장
- [건설부동산 풍향계]자본확충 필요한 생보사, 공모리츠 상장 '딜레마'
- 중흥그룹, 대우건설 인수자금 구조 변수 '촉각'
- '윈저 인수 실패' 더블유아이, 새 매물 찾는다
Translated by Kim So-in 의 다른 기사 보기
더벨 서비스 문의
02-724-4102유료 서비스 안내