Some local mid-sized construction companies are experiencing severe financial difficulties due to the protracted slump in the housing market, stoking concerns that they may be forced to undergo workout programs or get delisted from the local stock market.

The financially troubled companies include Hanil Engineering and Construction, Ssangyong Engineering and Construction, Doosan Engineering and Construction, and Keangnam Enterprises Ltd.

Market sources said Hanil, under a debt workout program, posted a net loss of 298.8 billion won ($274 million) last year. The builder reportedly recorded a capital impairment ratio of 109.5 percent. The construction firm could be delisted unless it resolves the capital erosion by the end of March.

Ssangyong is also struggling to recover from its financial pinch. Over the past two years, the Korea’s No. 13 builder has been recording a total deficit of 320 billion won ($294 million), an amount which is likely to constitute an erosion of its capital.

The company’s creditors earlier asked the state-run Korea Asset Management Corporation, which holds 38.75 percent of Ssangyong E&C’s shares, for a debt-for-equity swap and a revival process.

KAMCO, however, is currently leaning toward returning its share to the Public Fund Oversight Committee within the month and washing its hands of the Ssangyong business, officials said.

The Korea Exchange last week suspended all stock transactions for Ssangyong E&C until the end of March.

Also, Doosan Group recently decided to increase the capital of the money-losing Doosan Engineering & Construction by issuing new stocks worth 450 billion won in total. The No. 10 builder has long faced consecutive yearly deficits and in 2012 dented its corporate-parent’s net profit by 94.4 percent.

By Bae Hyun-jung (tellme@heraldcorp.com)