SEOUL (Reuters) – South Korea’s government will work with the central bank to swiftly deploy market stabilising measures if needed, the finance minister said on Friday, after Taeyoung Engineering & Construction said it was restructuring debt.
“If needed the Bank of Korea will prepare liquidity support measures through open market operations,” Choi Sang-mok said in a meeting with the Bank of Korea and regulators in Seoul, without elaborating.
Taeyoung E&C, a mid-sized South Korean builder on Thursday said it planned to restructure its debt, which amounts to 4.58 trillion won ($3.6 billion) including project financing loans.
That makes up less than 1% of assets held by local financial institutions.
“Local banks loss related to Taeyoung E&C won’t be too big,” Samsung Securities said in a report dated Thursday.
“We expect swift restructuring in project financing market and in doing that, shocks stemming from this won’t last too long as timely government support is likely to be on the way.”
(Reporting by Cynthia Kim; Additional reporting by Joyce Lee; Editing by Jamie Freed and Stephen Coates)