Lotte Tour Development: "No Issues with Going Concern Value Continuity Uncertainty"

Lotte Tour Development clarified on the 10th that there is "no issue" regarding reports by some media outlets claiming that the auditor pointed out "uncertainty about the going concern value."

According to Lotte Tour Development, the company received an "unqualified" audit opinion from the external accounting firm Woori Accounting Corporation in the 2022 audit report submitted on the 16th of last month. Woori Accounting Corporation also stated that the company is "not applicable" to the reasons for uncertainty about the going concern.

However, Woori Accounting Corporation mentioned in the notes that attention should be paid to the uncertainty (significant uncertainty regarding the going concern assumption) considering that the secured loan of 700 billion KRW raised in 2020 will mature at the end of November this year, which is a 3-year term, and that the long-term debt will be converted into short-term debt with a one-year maturity.

In this regard, Lotte Tour Development noted in the notes, "We are currently proceeding with refinancing through consultations with creditors regarding the borrowings related to the construction of Dream Tower, which matures on November 30 of this year," and "We expect refinancing within 50% of the appraisal value of related tangible assets (approximately 1.5 trillion KRW) to be feasible as planned."

In fact, Lotte Tour Development explained that it has selected a certain securities company as the lead manager for the maturing secured loan and has started preparations for refinancing, which is progressing smoothly.

In particular, the company emphasized that since all facilities including the hotel, casino, and shopping mall at Jeju Dream Tower Complex Resort have obtained permits and are operating normally after the initial secured loan of 700 billion KRW was executed, all conditions have improved compared to when the initial secured loan was executed.

A company official said, "Moreover, since direct flights connecting Jeju Airport and major overseas cities resumed from the 26th of last month, many foreign tourists are visiting Dream Tower," adding, "We expect a full-scale improvement in performance."

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