[Funding] Jeong Daeseon and Lee Hyuwon Shareholders Korea Asset Development, 175 Billion KRW PF for Samsung-dong Development Project

[Asia Economy Reporter Lim Jeong-su] Goryeo Asset Development, jointly owned by Jung Dae-sun, president of HN Group and third-generation of Hyundai Group, and Chairman Lee Hoo-won, has raised 175 billion KRW in funds for a luxury housing development project in Samseong-dong, together with its affiliate Megatrend Partners.

Goryeo Asset Development recently purchased the development site from Chairman Yoon Young-hwan, owner of Daewoong Group, and affiliated companies of the group. Hyundai Group-affiliated construction and financial companies participated in this development project and funding.

According to the investment banking (IB) industry on the 22nd, Goryeo Asset Development and Megatrend Partners received a total of 175 billion KRW in project financing (PF) loans from a special purpose company (SPC) established under the management of Hi Investment & Securities. Goryeo Asset Development raised 89.6 billion KRW, and Megatrend Partners raised 85.4 billion KRW respectively. The maturity of the PF loan is one year, with a lump-sum principal repayment condition after one year.

The two companies plan to use the raised funds for construction costs and other expenses related to the luxury housing development project. For this project, Goryeo Asset Development and Megatrend Partners recently purchased 11 lots, including 89-6 Samseong-dong, Gangnam-gu, Seoul, from Chairman Yoon Young-hwan’s family, Daewoong Pharmaceutical, and Daewoong Development. The plan is to build and sell ultra-luxury houses on the site.

Goryeo Asset Development, which entered this development project, currently has Kim Si-eun, an inside director, as the largest shareholder with 84.15% stake. President Jung Dae-sun and Lee Hoo-won, former vice chairman of Shinhan Investment Corp. and chairman of HN Group, hold 9.90% and 4.95% stakes respectively. Songdo Development PMC (Ltd.) holds 1% in preferred shares. Megatrend Partners is 100% owned by director Kim Si-eun.

Chairman Lee Hoo-won stepped down as vice chairman of Shinhan Investment Corp. in 2014 and served as CEO and chairman of Hyundai BS&C. Recently, as Hyundai BS&C changed its name to HN Group, he has been serving as chairman of HN Group. HN Group, founded by President Jung Dae-sun who holds 100% of the shares, operates businesses including system integration (SI), IT solutions, and smart factory construction. Its affiliates include Hyundai BS&E (100%), Hyundai Pay (15%), BSP Asset (100%), and Hi Asset (67%).

Hyundai Group affiliates broadly participated in this development project. Hyundai Construction is in charge of construction and also provided credit support such as funding replenishment agreements and conditional debt assumption agreements during the PF financing process. Currently, Hi Investment & Securities, now part of DGB Financial Group, is managing the PF financing and attracting investors.

An IB industry official said, "With the recent rise in land prices in the Cheongdam-dong area, ultra-luxury housing development projects are increasing," adding, "President Jung Dae-sun and others are expected to utilize their business networks for sales."