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S.Korea Moves to Reassure Markets as Builder Seeks to Restructure Debt

SEOUL, Dec 28 (Reuters) - Taeyoung Engineering & Construction, a mid-sized South Korean builder, said on Thursday it planned to restructure its debt and authorities quickly announced they were working to ensure its troubles did not spill over into financial markets.

The country's 16th largest builder has 4.58 trillion won ($3.6 billion) in debt including project financing loans, which is less than 1% of assets held by local financial institutions, the Financial Services Commission said in a statement.

"We see limited impact on financial markets as the issue was already known and as the market situation is stable, but the government plans to significantly beef up contingency measures to make sure any negative sentiment doesn't lead to increased volatility," it said.

The contingency measures include government loan guarantees for Taeyoung's project financing loans.

The country's central bank has hiked interest rates by a total of 300 basis points since 2021 to contain inflation, leading to a downturn in the property market.

Shares in Taeyoung ended down 3.7% on Thursday, bringing year-to-date losses to 43%.

The company saw net profit slide by a quarter in 2022 to 49.1 billion won ($38 million).

($1 = 1,287.0700 won)

Reporting by Cynthia Kim; Editing by Edwina Gibbs

Source: Reuters

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