[Funding] Hyundai Construction Consortium Secures 630 Billion KRW Loan for Remaining Payment on Emart Gayang Branch Acquisition

Emart

[Asia Economy Reporter Lim Jeong-su] The Hyundai Engineering & Construction consortium, consisting of Hyundai Engineering & Construction and Hana Alternative Investment Management, has secured 630 billion KRW in funds to pay the remaining balance for the acquisition of Emart Seoul Gayang Branch. Hyundai Engineering & Construction, the project owner and constructor responsible for developing the Gayang Branch into a mixed-use complex including residential apartments and officetels, provided joint guarantees for the loan.

According to the investment banking (IB) industry on the 14th, Hana Alternative Investment Grand Gangseo PFV obtained a loan of 630 billion KRW secured by the Emart Gayang Branch site. Bookrunner Bookook Securities gathered a lending syndicate by dividing the loan into four tranches by collateral and repayment priority: Tranche A 180 billion KRW, Tranche B 60 billion KRW, Tranche C 300 billion KRW, and Tranche D 90 billion KRW.

The procured funds will be used to pay the remaining balance for the acquisition of Emart Gayang Branch. The Hyundai Engineering & Construction consortium reportedly signed a contract in June to acquire Emart Gayang Branch for 682 billion KRW and paid a 10% down payment of the acquisition price.

Hana Alternative Investment Grand Gangseo PFV is the project developer for the site at 449-19, Gayang-dong, Gangseo-gu, Seoul, where Emart Gayang Branch is located. The consortium, composed of Hyundai Engineering & Construction, Hana Alternative Investment Management, and Eastern Investment Development, was formed to carry out the development project. Eastern Investment Development, established in July 2013, has grown mainly through hotel and mixed-use facility developments. Its largest shareholder is SkyValue, holding 51.4% of the shares.

Hyundai Engineering & Construction, the constructor, plans to build officetels in a mixed-use residential complex format on this site. They aim to start sales and construction in January 2023 after administrative procedures such as zoning changes and permits. Once the building is completed, Emart will re-lease the commercial space through a sale-and-leaseback arrangement.

Hyundai Engineering & Construction provided joint guarantees during the funding process. An IB industry official said, "The funding for securing the site was successful due to the debt guarantee by a financially sound construction company with trillions of KRW in cash liquidity," adding, "A large-scale main project financing is expected at the construction stage."