[Asia Economy Reporter Lim Jeong-su] ‘Koramco Specialized Investment Private Real Estate Trust No.126 (Trustee Shinhan Bank)’, which acquired JW Pharmaceutical’s Hwaseong logistics center, has raised 175 billion KRW in development funds for the logistics center.
According to the investment banking (IB) industry on the 20th, Koramco Trust received 175 billion KRW worth of project financing (PF) loans from a special purpose company (SPC) established under the lead of Kiwoom Securities. The loan maturity is a total of 2 years and 8 months (32 months) with a lump-sum repayment condition at maturity, but early repayment is possible depending on circumstances.
The raised funds will be used to construct the JW Pharmaceutical logistics center on the land located at 146-38, Annyeong-dong, Hwaseong-si, Gyeonggi-do. The funds will cover the purchase cost of the JW Pharmaceutical Hwaseong logistics center site, construction costs, project expenses, and financial costs.
JW Pharmaceutical recently sold its idle asset, the Hwaseong logistics warehouse site measuring 67,433㎡ (20,398 pyeong), to Koramco Trust for approximately 60.8 billion KRW to improve its financial structure. Shinsegae Construction is responsible for construction and will build buildings of 2 and 6 floors respectively on two project sites.
The construction period is until December next year, and Shinsegae Construction has agreed to a completion guarantee obligation. This agreement includes a clause that if the usage permit is not obtained within the deadline, Shinsegae Construction will bear the repayment burden of the loan.
JW Pharmaceutical invested 10 billion KRW of the proceeds from the Hwaseong logistics center sale into the Koramco fund. The remaining 50.8 billion KRW will be used for loan repayment and research and development (R&D) investment funds. The purpose is to improve the financial structure through the sale of idle assets while securing profitability through the development project.
An IB industry official said, "Cases where companies sell idle land near metropolitan areas to private equity funds (PEF) and then invest part of the sale proceeds into the PEF to develop logistics centers are increasing," adding, "mainly cold storage development is active."
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