Lotte Construction Eases Cash Crunch... Secures 1.5 Trillion Won from Bond Sales for Early Debt Repayment

[Asia Economy Reporter Onyu Lim] Lotte Construction announced on the 6th that it secured 1.5 trillion KRW in funds by selling bonds related to real estate project financing (PF) under the lead of Meritz Securities.

The bonds sold by Lotte Construction targeted asset-backed commercial papers (ABCP) and other bonds from PF projects guaranteed by the company. In addition to this sale, Lotte Construction fully sold corporate bonds totaling 450 billion KRW, including 200 billion KRW in convertible bonds in December last year and 250 billion KRW in public bonds on the 2nd of this month. Since October last year, the company has also proactively borrowed funds from affiliates to prepare for the temporarily tightened capital market.

Accordingly, at the end of last year, Lotte Construction plans to early repay 400 billion KRW borrowed from Lotte Homeshopping and Lotte Fine Chemical, and on this day, 500 billion KRW borrowed from Lotte Chemical.

A Lotte Construction official explained, “We have successfully refinanced a total of 1.7 trillion KRW in PF maturing over the past three months, so we can prepare for upcoming PF maturities without significant concern. This is an indicator that Lotte Construction’s financial soundness has further improved.”

A Meritz Securities official said, “Currently, Lotte Construction is judged to have sufficient liquidity to alleviate concerns caused by the temporary capital market tightening last year. Adding the purchase of bonds from this profitable PF project to the large-scale projects previously conducted with Lotte Construction is expected to strengthen the partnership even more.”