Dunchon Jugong, Project Loan Extension Fails... "Need to Find New Lead Lenders"

The Dunchon Jugong union and the construction business group have agreed on 8 out of 9 major issues. The 8 agreed clauses are ▲ re-verification of the existing construction cost increase ▲ review of the sale price ▲ general sales and union member sales ▲ design and contract changes ▲ verification ▲ general meeting resolution ▲ resumption of construction ▲ effectiveness of the agreement and responsibility in case of violation. However, since there is a disagreement regarding the commercial dispute, more time is expected before construction can resume. A view of the Dunchon Jugong reconstruction site in Gangdong-gu, Seoul, on the 7th. Photo by Moon Honam munonam@

[Asia Economy Reporter Kim Hyemin] The Dunchon Jugong Reconstruction Association in Gangdong-gu, Seoul, has failed to extend the maturity of a 700 billion KRW project loan. The association plans to form a new lending consortium to secure the project funds.

According to the maintenance industry on the 19th, the lending consortium consisting of 24 financial institutions, including NH Nonghyup Bank, notified the association and the construction business group the day before that the maturity extension of the 700 billion KRW project loan would not be possible.

The adjustment of the repayment schedule requires unanimous consent from all lenders, but not all agreed. Accordingly, the association must prepare to repay the loan by the maturity date of the 23rd of this month.

The association intends to raise the repayment amount due at the loan maturity by issuing short-term securitized bonds through a securities company. After putting out the urgent fire, they plan to form a new lending consortium and proceed with refinancing. An emergency delegates' meeting will be held on the 20th to approve this approach.

The construction business group plans to provide a guarantee once the association decides on the issuance of short-term securitized bonds. If this method also fails, they intend to proceed with subrogation payment.