SEOUL, Dec 28 Reuters Taeyoung Engineering Construction, a midsized South Korean builder, said on Thursday it planned to restructure its debt and authorities quickly announced they were working to ensure its troubles did not spill over into financial markets.

The country39;s 16th largest builder has 4.58 trillion won 3.6 billion in debt including project financing loans, which is less than 1 of assets held by local financial institutions, the Financial Services Commission said in a statement.

We see limited impact on financial markets as the issue was already known and as the market situation is stable, but the government plans to significantly beef up contingency measures to make sure any negative sentiment doesn39;t lead to increased volatility, it said.

The contingency measures include government loan guarantees for Taeyoung39;s project financing loans.

The country39;s central bank has hiked interest rates by a total of 300 basis points since 2021 to contain inflation, leading to a downturn in the property market.

Shares in Taeyoung ended down 3.7 on Thursday, bringing yeartodate losses to 43.

The company saw net profit slide by a quarter in 2022 to 49.1 billion won 38 million.

1 1,287.0700 won

Reporting by Cynthia Kim; Editing by Edwina Gibbs

Source Reuters