[Funding] Seoul Natso Refinances 110 Billion KRW Loan for Gangseo Autoplex PF

[Asia Economy Reporter Lim Jeong-su] Golf equipment company Seoul Natso has refinanced 110 billion KRW for the development of the Gangseo Auto Plex used car sales complex in Gayang-dong, Gangseo-gu, Seoul. Prolonged poor performance has led to a continuous burden of large-scale borrowings and financial costs.

According to the investment banking (IB) industry on the 11th, Seoul Natso recently raised a 3-year maturity loan of 110 billion KRW under the management of Hi Investment & Securities. The loan was executed in two parts according to collateral and repayment priority: senior loan of 60 billion KRW and subordinated loan of 50 billion KRW.

Seoul Natso provided the Gangseo Auto Plex site and buildings as collateral for the loan. Gangseo Auto Plex, located at 56-2 Gayang-dong, Gangseo-gu, Seoul, is the largest used car sales complex in Korea. Seoul Natso selected Kolon Global as the contractor, began construction in August 2017, and completed the new building last year.

Seoul Natso sought funding to repay the project financing (PF) loan borrowed for the construction of Gangseo Auto Plex. After repaying the existing borrowings, the remaining funds will be used for financial costs and operating expenses. As of the end of last year, the company’s total borrowings amounted to 114.6 billion KRW, all of which must be repaid or refinanced within the year.

Seoul Natso’s borrowings increased due to the Gangseo Auto Plex investment, while poor performance has continued. The company has recorded operating losses for seven consecutive years since 2014 and has posted net losses for ten years. Due to prolonged poor performance, the income generated is insufficient to cover borrowings and financial costs.

An IB industry official said, "Recently, land prices near Gangseo-gu have risen, increasing collateral value, which facilitated the smooth refinancing of large borrowings," adding, "If Seoul Natso’s performance does not improve, the burden of borrowings and financial costs will increase."

Seoul Natso is a golf equipment company with Chairman Song Cheol-ho holding a 90% stake. In December last year, Seoul Natso merged its wholly owned real estate rental management subsidiary, CAM Co., Ltd., through an absorption merger.

This content was produced with the assistance of AI translation services.