[Asia Economy Reporter Lim Jeong-su] Inchang Development, which is promoting the development project of the CJ CheilJedang site in Magok District, Gayang-dong, Gangseo-gu, Seoul, has raised 173 billion KRW in project financing (PF) funds. It is understood that about 1 trillion KRW has been raised for land purchase payments and other expenses since winning the bid for the site last year.
According to the investment banking (IB) industry on the 28th, Inchang Development borrowed 173 billion KRW from a special purpose company (SPC) established under the management of Bukuk Securities. The loan maturity is one year, with the principal repayment due in October next year. Bukuk Securities issued asset-backed commercial paper (ABCP) using the loan principal and interest to be repaid by Inchang Development as the underlying assets through the SPC, utilizing it as loan funds.
In this process, Hyundai Construction provided credit support such as a capital replenishment agreement to the SPC. If funds necessary for ABCP repayment are insufficient, Hyundai Construction will provide cash liquidity, and if it fails to fulfill this, it will bear the loan repayment obligation instead. It is known that several financial companies participated as ABCP investors.
Inchang Development is the project developer for the CJ CheilJedang site in Gayang-dong. Last year, it formed a consortium with Hyundai Construction and participated in the bid for the sale of the site, being selected as the successful bidder. It submitted a bid price of 1.05 trillion KRW, higher than competing companies such as the Daesang Industrial-Posco Construction consortium and the DS Networks-Daewoo Construction consortium.
The Gayang-dong site covers an area of 105,762㎡ (approximately 31,993 pyeong). It is a semi-industrial zone, and only about 50% of the total area can be used for residential land. For this reason, the construction of an officetown, which is somewhat free from regulations, is being pursued. It is adjacent to the Magok District and close to Yangcheon Hyanggyo Station on Line 9, so it is evaluated to have good business potential.
Inchang Development will use the raised funds for land acquisition and other development project purposes. It is understood that about 1 trillion KRW has been raised through PF since the beginning of the year after winning the bid for the site. The development project aims to start construction and sales in July next year and complete by January 2024. Hyundai Construction is in charge of construction.
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