This article was published on April 17, 2025, at 6:11 a.m. on the ChosunBiz MoneyMove site.
The refinancing of a collateral loan worth 839 billion won by Lotte Tour Development, which started in November last year, has been completed after five months. This follows the completion of sell-down by the securities firms that took over the total amount.
According to the investment banking (IB) industry on the 17th, Korea Investment & Securities and Shinhan Investment Corp., which oversaw the collateral loan for Lotte Tour Development last year, have recently completed the sell-down of the remaining loan bonds. At that time, they had aggregated a total of 400 billion won and had been reselling it to domestic institutions. Currently, 30 billion won remains, but the acquirer has been confirmed, and it is expected to be sold by the end of this month.
The refinancing was conducted last November for a total of 839 billion won. Lotte Tour Development put up its Jeju Dream Tower complex resort as collateral. The loan size increased by 58 billion won from the previous 780 billion won, with interest rates set at 6% for senior debt (800 billion won) and 8% for subordinate debt (39 billion won). The annual interest expense was reduced by more than 8 billion won compared to before, amounting to 51.5 billion won.
Institutions that acquired the sell-down volumes from Korea Investment & Securities and Shinhan Investment Corp. include Kwangju Bank, Kiwoom Securities, Pine Tree Investment & Management, and other capital companies and savings banks.
MERITZ Securities and Korea Investment Capital were also expected to participate but are reported to have withdrawn. In particular, Korea Investment Capital had planned to invest a total of 150 billion won but withdrew along with MERITZ Securities. An IB industry official noted, "I understand that the conditions proposed by MERITZ Securities were unacceptable to Lotte Tour Development."
Meanwhile, Lotte Tour Development recorded its highest ever performance last year, with sales of 471.5 billion won and operating profit of 39.2 billion won. Notably, the operating profit turned to a surplus for the first time in six years. However, due to remaining loan burdens, the net profit sector recorded a deficit of 114.3 billion won.