Embattled Tong Yang Group said Monday that three of its affiliates will be filing for court receivership after they failed to secure funds to keep themselves afloat against the liquidity shortage.
The 38th-largest conglomerate said Tong Yang Inc., Tong Yang Leisure Co. and Tong Yang International Inc. will be filing for court receivership on Monday as soon as the local court opens.
The troubled family-run company has been faced with mounting pressure to secure money to repay their debts worth 110 billion won (US$102.1 million) maturing on Sept. 30.
An official from Tong Yang Group said the decision came as the company's attempt to sell off some of their assets failed due to its faltering credit.
"We believe that a normalization through selling key units like Tong Yang Power won't be easy since the liquidity crisis has become known (to investors)," he said, asking not to be named.
All claims and obligations related to Tong Yang Group will be halted when the court receivership takes effect.