The project financing (PF) business site for the ultra-luxury high-end residential facility 'Podo by Fendi Casa', starting from a selling price of 20 billion won, is finally going to the public auction market. Due to the real estate market slump, the main creditor group decided to recover funds through sale as the transition to full PF became difficult.
According to the development industry and financial sector on the 20th, the main creditor group for the high-priced dwelling 'Podo by Fendi Casa', designed by the luxury brand Fendi Casa, has recently confirmed its decision to proceed with the public auction. The managing financial institution for the public auction is Samsung Securities. Currently, this business site has also been listed on the sales promotion business sites in the information disclosure platform for PF business sites by the financial authorities. The appraisal value of the business site is around 277.8 billion won. A representative of the main creditor group noted, 'The main creditor group is preparing for the sale following the public auction decision made recently,' adding, 'The auction schedule has not yet been confirmed.'
'Podo by Fendi Casa' is a high-end residential facility development project located in the area of 114 Nonhyeon-dong, Gangnam-gu, Seoul. This project, in which Fendi's interior brand 'Fendi Casa' is involved, was expected to consist of 29 apartment units and 6 officetel units, spanning 7 underground floors to 20 above-ground floors. Notably, this place received attention for its concept of high-end dwellings, stating that it would verify the occupation and asset size of prospective residents before deciding on their admission.
It is reported that this business site has found it challenging to transition from bridge loans to full PF due to the real estate market slump. A bridge loan refers to a short-term loan used by the initial developer to finance land costs or other permit-related funds. The scale of the bridge loan here is estimated to be around 180 billion won. The Podo by Fendi Casa business site fell into a state of expiration of benefits as it failed to pay interest on time in July last year, leading to its classification as a 'watchlist for insolvency'. Subsequently, as pressure increased from financial authorities to clean up insolvent PF business sites, the main creditor group discussed the site’s management, but it is reported that they could not reach a conclusion due to opposition from some senior creditor groups.
Another representative of the main creditor group stated, 'I understand that after discussions around the public auction emerged last year, the estimated loss amount calculated by the senior creditor group was too large, hence they opposed the auction,' adding, 'However, this time, recovery through auction is possible for both senior and mezzanine creditors, and we estimate that even junior creditor amounts can be covered within the provisions, allowing for an exit.'
Currently, among the mezzanine creditor group, financial companies other than Shinhan Savings Bank and DGB Capital have already sold their bonds to a non-performing loan (NPL) fund. Shinhan Savings Bank and DGB Capital are also expected to sell their bonds to the NPL fund within this month.
Among construction companies, SK Eco Plant established a blind fund to invest in this business site. The investment amount is approximately 7 billion won. A representative from SK Eco Plant explained, 'The scale of fund recovery and whether there will be any losses will be determined based on the auction results,' and added, 'The auction process is expected to take about 2 to 3 months, so we will only know the situation afterward.'