JR Global REIT public bondholders said they find it difficult to accept the company's proposed plan for a long maturity extension and repayment, and have drawn up their own debt workout plan to improve the chances of recovering principal and interest.
The administrators of the JR Global REIT public bondholders' online cafe said on the 24th that they plan to submit an Autonomous Restructuring Support (ARS) proposal, prepared after gathering member opinions, to the company and the Seoul Bankruptcy Court this week.
JR Global REIT's public corporate bond balance is 320 billion won, accounting for 60% of the company's total debt. As of the 23rd, 1,114 public bondholders had signed the petition, with an aggregate face value of 88.34 billion won. The approval rate relative to total bonds is 26.04%.
According to the public bondholders, the company proposed extending the maturity of the public bonds by more than five years to the end of 2031 and paying only the originally agreed interest during the extension period.
The bondholders countered that this plan shifts real estate market volatility and refinancing risk onto the bondholders. They added that it is difficult to accept because it offers no compensation commensurate with the extension, no binding conditions to secure execution, and no contingency plan in case of nonperformance.
The bondholders proposed a "dual-track" approach that simultaneously pursues the sale of assets in the United States and Belgium and institutional refinancing. On the condition that the funds secured are used first for early redemption of the public bonds, they said they would agree to a limited extension through the end of 2028.
To compensate bondholder risk for the extension, they proposed applying an additional 3.0% per year to the coupon rate through the end of 2027, and up to an additional 5.0% in stages through 2028.
If the company fails to meet the pre-set sale, refinancing, and repayment conditions by the end of 2027 or by the conditional extension deadline at the end of 2028, they demanded that an event of default (EOD) be deemed to have occurred automatically and that asset sale procedures commence without delay.
The bondholders' cafe administrators said, "What bondholders are asking for is not the company's immediate liquidation, but an exit strategy that functions decisively if promises are not kept while still leaving room for normalization," adding, "Rather than a five-year extension that cannot guarantee execution, pursuing sales and refinancing simultaneously and extending the term only in a limited way when there are results is a more responsible solution for both the company and bondholders."
The bondholders' cafe administrators also urged participation from public bondholders. The administrators said, "No matter how reasonable the proposal, if the number of supporting bondholders and the amount are insufficient, it is difficult to negotiate with the company," adding, "We will continue to update the number of participants and the bond amount and reflect them in the final ARS negotiations."