It has been confirmed that Shinyoung, one of the largest developers in Korea, sold a site in Haeundae District, Busan, which it intended to develop under its high-end brand. Additionally, it borrowed 90 billion won in operating funds for its subsidiary Brighton Yeouido, using the shares it owned as collateral. This amount is more than 30% of Shinyoung's total equity capital. Major developers are facing difficulties due to the recent real estate market recession and issues with project financing.
According to the financial investment and construction industries on the 16th, Shinyoung sold a 2,673-square-meter (approximately 808 pyeong) site in U-dong, Haeundae District, Busan, which it acquired in November 2021, to Mugunghwa Trust last October. This site was purchased by Shinyoung from the Ahn Dang Foundation, where the former dormitory of Busan International Foreign School was located. At the time, Shinyoung's acquisition cost was 13.8 billion won. Shinyoung had planned to develop the site into Brighton Haeundae, applying the Brighton brand found in core areas of Seoul such as Yeouido and Nonhyeon-dong, but abandoned the plan and resold the land. An industry source noted, 'Given the market conditions, it seems they would not have made significant profits from the sale.'
Meanwhile, Shinyoung continues to borrow operating funds from its subsidiary Brighton Yeouido (100% equity). From October to November, it borrowed a total of 90 billion won in three installments. The shares of Daenong that were held as collateral were provided. The total loans amount to 30.7% of Shinyoung's equity capital from last year (292.598 billion won).
By the timeline, 35 billion won was borrowed on October 10, followed by an additional 30 billion won borrowed on October 30 of the same month. An additional 25 billion won was borrowed on November 29. The maturities for these loans are October 10, 2027, October 30, 2027, and November 29, 2027, all with an interest rate of 4.6%.
Shinyoung is considered one of the big three developers alongside DS Networks and MDM Group. It was established in 1984 by founder Jeong Chun-bo, who is referred to as 'Korea's Donald Trump.' Last year's revenue was 782.01337 billion won, with an operating profit of 73.46255 billion won, and a net loss of 42.8995 billion won.
An industry source stated, 'The development industry is facing significant difficulties due to the recession in the real estate market, and even large developers cannot escape this impact.' A Shinyoung official explained, 'It was a long-term borrowing made through the subsidiary to procure operating funds.'