"This Time, They Will Also Sell Separately"... Bumyang Construction and Bumyang D&C Put Back on the Market [fn Market Watch]

[Financial News] Bumyang Construction, a KOSPI-listed construction company based in Busan that is undergoing court receivership, and its subsidiary Bumyang D&C have begun searching for a new owner for the second time. Following the first sale attempt in April, the companies are again entering a public bidding process. This time, however, the deal structure also leaves room for separate sales, not just a package transaction.
According to the investment banking industry on the 27th, Samil PricewaterhouseCoopers, the lead manager for the sale of Bumyang Construction and Bumyang D&C, is conducting a second public sale for a pre-approval merger and acquisition. The process will seek outside capital through a public bidding format, including a third-party allotment capital increase, and letters of intent will be accepted until the 4th of next month.
For this sale, the transaction structure has been made more flexible so that buyers can acquire Bumyang Construction and its wholly owned subsidiary Bumyang D&C together or separately. After the first sale failed in April, the move appears aimed at easing the financial burden on potential buyers and broadening their options to improve the chances of a successful deal.
Bumyang Construction's court receivership was driven largely by the construction downturn and project-financing burdens tied to completion guarantees. The company incurred debt assumption obligations on PF loans totaling 142 billion won, including about 32.2 billion won for an officetel project in Jeonnong-dong and about 109.8 billion won for a mixed-use development in Mapo-ro District 1.
Rising raw material and labor costs, a sluggish housing sales market, and delays in collecting construction payments further strained liquidity. The company ultimately filed for court receivership with the Suwon Bankruptcy Court on Jan. 6.
Whether the company can remain listed is also a key variable in this M&A process. Bumyang Construction's stock trading was suspended in 2024 after auditors issued a disclaimer of opinion, and the company later won an objection review and was granted an improvement period. If its financial structure and listing-related uncertainties are resolved, the buyer could secure control of a KOSPI-listed company, which is seen as an investment attraction.
Its project pipeline is also drawing attention. Founded in 1958, Bumyang Construction is carrying out the 1.44 trillion won Gijang Reus City development project in Gijang County, Busan. Bumyang D&C is also pushing ahead with an urban development project worth about 210 billion won in Yangbok District in Anseong, Gyeonggi Province.
The seller said the two companies' major projects are expected to generate about 1.6615 trillion won in revenue in the future. In addition, the Cheonan Dujeong-dong development project, in which Bumyang Construction holds a 22.83% stake, is expected to bring in about 54.8 billion won in dividends when it is converted to sales in 2030.
An official in the investment banking industry said, "In a construction company's restructuring M&A, both existing PF contingent liabilities and the potential for project normalization must be considered." The official added, "Bumyang Construction has allowed separate sales in the second round, lowering the entry barrier for potential buyers. How much of the PF risk it can clear up will determine whether the sale succeeds."
[email protected] Kim Kyung-ah Reporter