KD enters court receivership after construction slump drains liquidity

KD said Tuesday it has entered court receivership following a decision by the Suwon Rehabilitation Court to open rehabilitation proceedings on March 18. The Kosdaq-listed construction company attributed the filing to a sharp decline in sales caused by a prolonged slump in the building and housing division market, compounded by liquidity constraints after withdrawing a planned paid-in capital increase.

The court set an October 2 deadline for KD to submit its rehabilitation plan, while the window for creditors and shareholders to file claims ran from April 30 to May 27. An investigation into these claims was conducted between May 28 and June 24 under the supervision of court-appointed receiver Ahn Tae-il, the company's representative director.

"KD recently saw sales plummet due to the long-term depression in the construction and sales market and delays in project orders," the company said in a statement. "Significant restrictions on securing working capital occurred due to reasons such as the withdrawal of the paid-in capital increase we had been pursuing to raise funds."

The company pledged to work through the legal process to improve its financial structure and operational efficiency. "We will make every effort to achieve management normalization and return to being a sustainable company as soon as possible," KD added.

First-quarter revenue relied almost entirely on a single project, with sales from the Haeundae U-dong officetel division in Busan accounting for 45.3 billion won ($31.7 million) of the 45.9 billion won ($32.1 million) total. The builder, which specializes in direct sales and contracted construction of commercial buildings, officetels, and apartments, reported an order backlog of 35.5 billion won ($24.8 million) as of the end of March. Current projects include new construction for the Doksan-dong residential union, repair facilities in the Jinsa district, and single-family housing lot development in Dongtan 2.

Looking ahead, the builder stated it intends to focus on expanding its order backlog by strengthening participation in bids.