Lotte Group Offers Its Iconic Lotte Tower as Collateral to Banks
This is a heck of a collateral that is being offered by the Lotte Group:
Lotte Group said Thursday that it provided Seoul’s landmark Lotte World Tower as collateral to strengthen the creditworthiness of corporate bonds issued by its struggling chemical unit, Lotte Chemical. The move is part of the group’s efforts to reassure investors about its financial prudence.
Lotte Group said in a statement that it will offer Lotte World Tower to banks as collateral to enhance the creditworthiness of its corporate bonds through bank guarantees related to the bond agreements.
The 123-story, 555-meter Lotte World Tower is the world’s sixth-tallest building and the highest in Korea. Owned by Lotte Property & Development, its current value exceeds 6 trillion won ($4.3 billion).
The statement came after Lotte Chemical revealed last week that it was in a position where creditors could declare an event of default and demand early repayment of its corporate bonds, valued at 2.05 trillion won. This development arose from the company’s inability to comply with the predetermined terms of the bonds.
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