Euljiro 3-ga Redevelopment Project Secures 445 Billion KRW PF Financing

[Asia Economy Reporter Lim Jeongsu] A project financing (PF) worth 445 billion KRW necessary for the urban maintenance-type redevelopment project in Euljiro 3-ga, Seoul, has been successfully secured. The procured funds will be used for construction payments and other expenses related to the redevelopment project in the Euljiro area.

According to the investment banking (IB) industry on the 2nd, Woorim AMC Co., Ltd. recently received a PF loan of 445 billion KRW from a financial consortium composed of securities firms and other financial institutions. The loan was divided into senior loans of 330 billion KRW and subordinated loans of 115 billion KRW based on collateral and repayment priority.

Woorim AMC is the project operator for the urban maintenance-type redevelopment project of Euljiro 3-ga District 6, located at 35-10 Supyo-dong, Jung-gu, Seoul. The investors include Lee Minseok, co-CEO of Woorim AMC (35% stake), Korea Land Trust (16%), JS Group (26%), Hyundai Engineering (19%), and Woori Bank (4%).

Woorim AMC has selected Hyundai Engineering as the contractor to carry out the Euljiro redevelopment project. The procured funds are planned to be used for construction payments and financial costs.

Hyundai Engineering has committed to completing the construction within approximately 59 months (one month before the loan maturity) after the PF loan disbursement, under a responsibility completion obligation. If the completion deadline is missed, Hyundai Engineering must assume the developer’s debt and repay the loan on their behalf.

Euljiro 3-ga District 6 was designated as a redevelopment zone in October 2016. It has long been pointed out that urban function recovery is urgently needed due to the concentration of deteriorated poor-quality buildings and outdated urban industries.

Seoul City conditionally approved the plan to revise the maintenance plan for this area last year. To preserve the traces and memories of old Euljiro, alleys will be created inside buildings, and the area around Chungmuro 9-gil will be developed as a specialized industrial street to protect urban industries while supporting street revitalization.