The recently announced halt to construction on Gold Tower 42, the 360-unit mixed-used Phnom Penh skyscraper, is due to the fact that the project’s builder, Seoul-based Hanil Engineering & Construction, is undergoing financial restructuring, a company representative said yesterday.
Hanil was one of the 65 contractors and shipbuilders South Korean government regulators asked to undergo a creditor-led debt-restructuring program this spring.
Gold Tower 42 project director Kim Kyo-won said yesterday that Hanil has shut down construction operations in Phnom Penh because of the restructuring.
“We hope to restart soon, but at the moment we don’t know when that will be,” said Mr Kim, who declined to further detail the situation.
In a statement yesterday, Yon Woo, Tower 42’s South Korean developer, voiced confidence in Hanil and its belief that construction will resume in the immediate future.
“Even though the site is quiet now, the project, Gold Tower 42 itself, does not have any matter with the process. Moreover, Yon Woo Cambodia Co, Ltd is confident that Hanil E&C will resume construction as soon as possible right after the conclusion of the audit and inspection,” read the statement, which had been approved by Hanil representatives prior to its release.
“In case of the above process, auditors and inspectors do not want that the company keeps going on its business activities during the period of audit and inspection. Because they have a responsibility to make clear and transparent statement, they do not allow any financial changes before they get some results,” the statement read.
Yon Woo Cambodia assistant manager Kim Tae-yun said yesterday that Yon Woo had fulfilled its financial obligations to the Tower 42 project under its contract with Hanil and expected Hanil would be able to do the same.
“In brief, Hanil in our agreement has the responsibility to finish it at their own expense,” said Mr Kim
According to Mr Kim, Yon Woo has not yet begun to consider alternative plans should Hanil be forced to back out of the project, which he said was still on target to finish late next year or in early 2012 in accordance with the original schedule.
Mr Kim added that the project had received additional funds from buyers and roughly half of the tower’s luxury apartments had already been sold.
“We only worry now that with the Cambodian people will not understand that financial restructuring caused holding activities are normal,” said Mr Kim.