Lotte Engineering & Construction Co. said Thursday it has completed the creation of a 2.3 trillion-won (US$1.73 billion) project financing (PF) fund. (Image courtesy of Lotte E&C)
SEOUL, Mar. 7 (Yonhap) — Major South Korean builder Lotte Engineering & Construction Co. (Lotte E&C) said Thursday it has completed the creation of a 2.3 trillion-won (US$1.73 billion) project financing (PF) fund, which will help cut its interest burden from high-interest debt.
Five local banks, including KB Kookmin Bank and the state-run Korea Development Bank, and three securities companies all had deposited their respective portions in the PF fund as of Wednesday, Lotte E&C said.
The construction company also said it has succeeded in borrowing an additional 500 billion-won long-term loan from Meritz Financial Group.
Lotte E&C, the construction arm of retail titan Lotte Group, said it has thus repaid a 1.5 trillion-won loan borrowed last year from Meritz Financial Group, which will reduce its interest-rate burden sharply.
The builder said it plans to pay back 2 trillion won in PF-related contingent liabilities by the end of this year in an effort to boost its financial health.
A contingent liability refers to a potential liability that could occur, depending on the outcome of an uncertain future event.
A Lotte E&C official said the recent inflow of cash is expected to help dissipate market concerns over the builder’s contingent liabilities.
As of end-December last year, Lotte E&C cut its debt-equity ratio by 31 percent from a year earlier.
(Yonhap)
