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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Jisun] Lotte Tour Development has successfully refinanced a ₩830 billion secured loan, significantly improving its financial structure.
On November 29, the company announced that it had signed a refinancing agreement with domestic banks and existing lenders to address the one-year maturity of its previous secured loan due November 30.
The new ₩839 billion financing is secured against a 59% ownership stake (based on gross floor area) in the Jeju Dream Tower Integrated Resort. Given the appraised value of ₩1.8048 trillion, the loan-to-value (LTV) ratio stands at 46%.
Key Improvements in Terms
Reduced Interest Rates: Unlike last year’s high-interest environment, where the company had to split ₩7.856 trillion into three tranches at high rates, this refinancing consolidates ₩8 trillion into a single first-priority loan at a 6% interest rate, reducing financial burdens.
Extended Maturity: The new loan has a 30-month term, maturing in May 2027, compared to the previous one-year term.
Cost Savings: The reduced interest rate will save the company approximately ₩20 billion annually in interest expenses.
Additionally, the refinancing agreement allows for early repayment without penalties starting in 20 months, providing flexibility to reduce debt as operations improve.
Financial Outlook
Lotte Tour Development stated that the transition of all short-term borrowings into long-term debt alleviates concerns over immediate repayments. With continued operational improvements, the company plans to gradually reduce its debt burden.
Market analysts expect the company, which recently achieved an operating profit turnaround, to further boost net income in 2024 by leveraging these refinancing benefits.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
