The headquarters building of Taeyoung Engineering & Construction in Yeouido, Seoul (Yonhap)

Debt-ridden Taeyoung Engineering & Construction made a U-turn to stick with its initial self-rescue package to avoid court receivership, which could put over a thousand of its subcontractors at risk.

The 16th-largest construction company in South Korea in terms of capacity is expected to unveil additional plans, which could include offering the ownership family's stake in Taeyoung Group's holding firm, to win creditors' approval by Thursday for the launch of a debt workout program.

Taeyoung Group injected 89 billion won ($67.6 million) into its troubled construction unit with the proceeds from the sale of its overseas trading affiliate Taeyoung Industries on Monday morning, in a move demanded by creditors and financial authorities to prove the group’s “willingness to implement its self-help plan."

It was one of four self-rescue measures announced by the group last month in the aftermath of a liquidity crunch over real estate project financing loans.

"The remaining three schemes will also be implemented as soon as possible through resolution by the board of directors," the group said.

Taeyoung has drawn criticism that the group is only seeking to maintain management rights after it abandoned its initial promise to use the proceeds from Taeyoung Industries' sell-off for the indebted builder.

The group used the cash to address joint debt within the group’s holding firm, TY Holdings, which enraged creditors for prioritizing the holding firm rather than conducting a genuine workout program for the troubled construction firm.

Finance Minister Choi Sang-mok said no public funds will be provided for Taeyoung, which has run a "debt-dependent business." "The debt ratio is higher than that of other companies, and it guaranteed a myriad of project financing businesses," he told lawmakers at the National Assembly.

Including Choi, top financial officials of the government, financial regulators and the Bank of Korea held a meeting to discuss Taeyoung’s debt restructuring plan earlier in the day.

“Some progress has been made, such as Taeyoung Group's promise to implement four self-rescue plans, and creditors will continue to consult based on this,” the Finance Ministry said in a statement. “Taeyoung needs to gain the trust of creditors by presenting a specific additional self-rescue plan.”

Taeyoung Group so far has put forward its self-rescue plan centering on four means to repay debts -- injecting 89 billion won into Taeyoung E&C by selling Taeyoung Industries, drawing funds through the sell-off of its stake in sewage treatment unit Ecorbit, the sale of its resort operator BlueOne as well as putting up as collateral its stake in grain handling and storage company Pyeongtaek Silo.

Taeyoung has come under pressure over its “insufficient” self-rescue efforts as the government and creditors led by the Korea Development Bank to do more.

Prime Minister Han Duck-soo said Taeyoung’s management should do “the painful work as if cutting their bones,” on Sunday.

Lee Bok-hyun, chief of the Financial Supervisory Service, stressed that Taeyoung has to come up with plans that the Korea Development Bank can at least accept to persuade other creditors.

Taeyoung’s debt restructuring plan remains half-baked, as it has not mapped out a scheme to provide collateral for the holding company's shares and secure operating funds of at least 500 billion won, which were additionally requested by creditors.

Financial authorities and creditors are demanding that the ownership family, including Taeyoung Group Chairman Yoon Seok-min, put up 33.7 percent of TY Holdings shares as collateral. Creditors suspect that the family is risking the bankruptcy of Taeyoung E&C to protect the holding company and its management rights of broadcaster SBS.

If Taeyoung E&C is put under court receivership, a chain reaction of bankruptcies of its subcontractors could be sparked, as its transactions with banks and all creditors will be suspended.

According to the construction company, the number of subcontractors tied to Taeyoung business stands at 1,075, nearly double the 581 the government tallied.

The creditors' meeting, which will make the final decision on whether to launch the workout program, is to be held Thursday.