Taeyoung Engineering and Construction has applied for debt restructuring in a bid to resolve its struggle with a liquidity shortage due to real estate project financing(PF) loans. 

According to the company's main creditor Korea Development Bank(KDB) on Thursday, the application for a workout by the nation's 16th-largest builder in construction capacity was received earlier in the day and the establishment of a creditors' meeting is forthcoming.

The troubled builder is grasping with the maturity of a PF loan, which is based on future cash flow from real estate development projects, related to an office building project in Seoul's Seongsu neighborhood worth 48 billion won, or around 37 million U.S. dollars, with other debt set to mature in early January.

According to the Financial Supervisory Service, Taeyoung E&C's debts as of the end of the third quarter were estimated at one-point-nine trillion won, with a debt ratio of 478-point-seven percent.

Once the company submits a self-rescue plan, its creditors are expected to decide on support, with debt-restructuring requiring consent from 75 percent of them.

The workout application is feared to have repercussions on local builders with high exposure to real estate PF loans in the wake of prolonged stagnation in the domestic property market.