Shinsegae Construction Secures Liquidity in Advance by Selling Leisure Business

Shinsegae Construction is securing liquidity by selling its leisure business division to Chosun Hotel & Resort. Accordingly, Shinsegae Group's leisure business will be unified under Chosun Hotel & Resort.

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On the 14th, Shinsegae Construction and Chosun Hotel & Resort each held board meetings and announced that they resolved to enter into a business transfer agreement for the entire leisure business division of Shinsegae Construction. The two companies plan to approve the transfer at their shareholders' meetings next month and complete the related procedures by the end of April.

The transfer includes Jayu CC (18 holes) in Yeoju-si, Gyeonggi Province, Trinity Club (18 holes) in Yeoju-si, Gyeonggi Province, indoor and outdoor water play facilities Aqua Field (three locations inside Starfield in Hanam, Goyang, and Anseong), and landscaping business.

Shinsegae Construction expects that this business transfer of the leisure division will not only improve financial soundness but also help improve liquidity by enabling additional funding after the merger with Shinsegae Yeongrangho Resort.

Once the related procedures are completed, Shinsegae Construction will see an increase of about 30 billion KRW in capital, and approximately 270 billion KRW of golf course membership deposits, recognized as liabilities in accounting, will be eliminated, improving the debt ratio. Additionally, liquidity will be further strengthened by securing about 180 billion KRW from the sale proceeds.

Meanwhile, Chosun Hotel & Resort expects to expand its business area through this acquisition and maximize synergy effects linked to its existing business. They plan to leverage the expertise accumulated in the hotel industry to the leisure business, providing differentiated services that encompass customers' overall lifestyles and aiming to become a 'comprehensive hospitality leading company.' The funds for acquiring the leisure business division will be raised through financial institutions and others.

A Shinsegae Construction official said, "By selling the leisure business division, we will proactively secure additional liquidity and significantly improve our financial structure," adding, "Based on this, we plan to start a structural improvement process in our core construction business."

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