[Apha Biz=(Chicago) Reporter Paul Lee] GS Engineering & Construction, which is suffering from the aftermath of the collapse of its Gumdan apartment in Incheon, is facing a credit rating crash.

While the Korea Enterprise Evaluation registered GS Engineering & Construction (006360) as a "negative review target," the NICE credit rating also lowered its long-term credit rating outlook to "negative." Earlier, the Korea Credit Rating also lowered GS Engineering & Construction's credit rating outlook.

The Korea Enterprise Evaluation said on the 30th that GS Engineering & Construction's unsecured bonds will be adjusted to 'A +, stable' and 'A +, negative review'. Due to the collapse of the underground parking lot of the Geomdan apartment, GS E&C has recently been forced to take high-intensity administrative measures, including a request for an eight-month suspension by the Minister of Land, Infrastructure and Transport and a two-month suspension by the Seoul Metropolitan Government.

GS E&C has remained within the top five in the construction capacity evaluation and has the top brand recognition in Korea that can win orders for maintenance projects in the Gangnam area with Samsung C&T (028260) and DL E&C.

However, the accident is expected to negatively affect GS Engineering & Construction's intangible business value and ability to secure construction supplies.

The NICE credit rating also lowered GS Engineering & Construction's credit rating outlook from 'stable' to 'negative'.

Meanwhile, the previous day, the Korea Corporate Evaluation also adjusted its credit rating outlook from "stable" to "negative," saying that the suspension of operations in connection with the inspection accident has increased operating volatility in the housing business.

 

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