JR Global REIT's autonomous restructuring support program (ARS) has been extended by one month.
According to the Financial Supervisory Service's electronic disclosure system on the 15th, the Seoul Bankruptcy Court on this day extended JR Global REIT's ARS period by one month, from June 15 to July 15.
The ARS program is a system in which corporations, after filing for rehabilitation with a court, temporarily delay the commencement decision and consult with creditors to autonomously negotiate debt reorganization. During the ARS period, it discusses with key creditors plans for debt repayment and measures to secure liquidity.
Earlier, JR Global REIT filed for commencement of rehabilitation proceedings with the Seoul Bankruptcy Court after a failure to pay principal and interest on 40 billion won in short-term bonds on Apr. 27.
The situation stemmed from a liquidity squeeze due to a decline in the value of the underlying asset, the Finance Tower in Brussels, Belgium. As the collateral value (GAV) of Finance Tower was revised downward, the loan-to-value (LTV) exceeded the covenant threshold, triggering a "cash trap." With cash inflows from the asset effectively cut off, repayment of short-term bonds was disrupted, ultimately leading to the rehabilitation filing.
Meanwhile, JR Global REIT said the trial dates for a lawsuit underway in the Commercial Court in the United Kingdom have been set for Aug. 11–13. The company argues there were problems in the asset valuation process by global real estate consulting firm JLL for Belgium's Finance Tower.