Kolon Global Daejeon Bongmyeong Site Successfully Converts to Main PF... "Alleviating Contingent Liability Concerns"

Kolon Global's Daejeon Bongmyeong project site, which had raised concerns over contingent liabilities related to project financing (PF), has successfully transitioned to full PF.

According to Kolon Global on the 12th, the Korea Housing Finance Corporation (HF) has completed the final approval for the Daejeon Bongmyeong project site and converted it to full PF. Kolon Global stated that through the full PF conversion of the Daejeon Bongmyeong project site, the contingent liability risk has been dispelled. The contingent liabilities for the Daejeon Bongmyeong project amount to 249.1 billion KRW, accounting for more than 40% of Kolon Global's contingent liabilities for three unstarted sites (approximately 610 billion KRW).

Perspective view of Kolon Global Daejeon Bongmyeong site. Photo by Kolon Global

This project involves constructing 562 apartment units, 129 officetel rooms, and neighborhood living facilities on lot 543 in Bongmyeong-dong, Yuseong-gu, Daejeon. Originally an officetel-centered project, it was changed to a mixed-use residential complex including apartments last October due to market changes and other reasons.

Kolon Global announced that the sales rates for started sites such as Gimhae Yulha Regional Housing Association (300 billion KRW) and Daejeon Seonhwa 1st Phase (110 billion KRW) have already exceeded 97%, effectively resolving a significant portion of the PF contingent liabilities. Unstarted sites like Daejeon Seonhwa 3rd Phase and Ulsan Yaeum are also expected to follow the process of full PF conversion within this year. In the case of Daejeon Seonhwa 3rd Phase, Korea Investment & Securities recently decided to issue a 1-year LOC (Letter of Commitment).

A Kolon Global representative said, “With this full PF conversion of Daejeon Bongmyeong, concerns about contingent liabilities and workouts are expected to be resolved,” adding, “We will successfully complete the remaining unstarted sites and resolve housing sector risks by strengthening the non-residential portfolio.”