Daewoo E&C Proposes Conditions to Minimize Gaepo Woosung 7th Contribution...‘Zero Interest’

[Financial News] Daewoo E&C unveiled a financial strategy to minimize member contributions exclusively for Gaepo Woosung 7th on the 18th. Previously, Daewoo E&C proposed a shocking interest rate of 'CD+0.00%' for the entire essential project cost of the association, estimated to be around 400 billion won.
According to the company, in addition to 'CD+0.00%', they also presented a blueprint for reducing additional contributions. Specifically, it includes △ 100% contribution payment upon occupancy without consumer financing △ payment within sales revenue △ application of the lowest price index fluctuation rate until actual construction begins.
Typically, in redevelopment projects, construction companies propose 100% contribution payment upon occupancy, but often with the condition of 'consumer financing'. Interest must also be paid on contributions upon occupancy. Daewoo E&C's proposal explains that it is a true 100% contribution payment upon occupancy without consumer financing, meaning no interest.
Additionally, they proposed the most favorable method for the association, 'payment within sales revenue', for the method of paying construction costs and the order of repaying project costs. Furthermore, they presented a drastic condition where construction costs are repaid last, after repaying other project costs and interest expenses first.
To minimize the burden of construction costs, they also proposed applying the lower value between the consumer price index and the construction cost index. A company representative stated, "Competitors proposed applying the average value of the two indices, but considering the difference between the lower value and the average value of the two indices over the past five years, there is a difference of about 2.6%p," and "When applying this condition to the total construction cost and construction period, there is a difference of hundreds of billions of won in financial costs." They also explained that they would provide a price increase deferment period of up to 18 months to minimize the burden on association members in the era of high inflation.
This representative stated, "The overwhelming financial and business conditions proposed by Daewoo E&C so far are a preemptive investment to enhance brand value rather than company profit, as it marks the first start of the high-end brand 'Summit' in 11 years," and "We will definitely fulfill the promised conditions."


ljb@fnnews.com Lee Jong-bae Reporter