[Asia Economy Reporter Lim Jeong-su] The project financing (PF) fund worth 160 billion KRW for the development of the Cheongju Guksa Industrial Complex, which had been delayed for a long time, has been successfully secured. It is expected that the land compensation procedures for the existing landowners will be completed and the development project will accelerate.
According to the investment banking (IB) industry on the 20th, the developer 'Cheongju Guksa General Industrial Complex Co., Ltd.' recently raised 160 billion KRW in PF funds from a consortium led by Korea Investment & Securities and Shin Young Securities. The PF was executed in two tiers according to repayment priority: 130 billion KRW in senior debt and 30 billion KRW in subordinated debt. The loan maturity is 4 years, with a lump-sum principal repayment at maturity.
Cheongju Guksa General Industrial Complex Co., Ltd. is the developer of a general industrial complex located at 220 Guksa-ri, Oksan-myeon, Heungdeok-gu, Cheongju-si, Chungcheongbuk-do. The project site covers a total area of 956,229㎡ (289,766 pyeong). Hanwha Construction has been selected as the contractor, with plans to start sales and construction in March next year and complete the project by 2024.
With the successful PF financing, the development project is expected to gain momentum. The developer plans to use approximately 50 to 60 billion KRW of the raised funds for land acquisition and the remainder for project costs. The total project cost for the Guksa Industrial Complex is planned at 213 billion KRW, with about 74.6 billion KRW for land compensation, 114.8 billion KRW for construction costs, and approximately 23.6 billion KRW for other expenses.
The Guksa Industrial Complex project faced difficulties due to issues in land acquisition by the project developer since its launch in 2014. However, after the project developer was changed through a public offering process in June last year, the project gained new momentum. An IB industry official predicted, "Once the land compensation procedures are completed through PF financing, the industrial complex development project can proceed rapidly."
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