"Return after 49 Years"...Dongkuk Steel, Reacquires Ferrum Tower for 645.1 Billion Won

[Financial News] Dongkuk Steel Group has reacquired the group's symbolic building, 'Ferrum Tower', after 10 years. It is a return after 49 years since moving the headquarters to the former site of Cheonggye Elementary School in Euljiro in 1974.
Dongkuk Steel announced that it held an extraordinary board meeting on the 25th and decided to purchase Ferrum Tower located in Suha-dong, Jung-gu, Seoul. On the same day, a real estate sales contract was signed in the presence of both the seller and buyer at the Samsung Life Seocho Building, with an acquisition price of 645.06 billion won.
Ferrum Tower is a skyscraper built on a 3,749㎡ (1,134 pyeong) site with 6 basement floors and 28 above-ground floors. Reflecting the identity of the steel group, the name 'Ferrum', meaning 'iron' in Latin, was chosen for the building, and it has been used as the headquarters since its completion in August 2010.
However, in the mid-2010s, due to the continued slump in the steel market and poor performance, Dongkuk Steel embarked on a high-intensity restructuring and signed a financial structure improvement agreement with the Korea Development Bank in 2014. Subsequently, structural improvement measures such as withdrawal from the thick plate business, sale of UIL, and merger with Union Steel were carried out, and Ferrum Tower was sold in April 2015 as the last step in financial improvement.
Since then, Dongkuk Steel has focused on profitable products such as rebar, shaped steel, and color steel plates, and strengthened its internal stability by withdrawing from the Chinese subsidiary and selling the CSP steel plant in Brazil. As a result, the credit rating, which was BB+ at the end of 2015, was upgraded to BBB+ (stable) in 2023, and the debt ratio significantly improved from 136.8% to 99.0% during the same period.
This reacquisition of Ferrum Tower is evaluated as a decision symbolizing the fruition of a 10-year journey of structural improvement. Following the restructuring of the governance structure through the division into the holding company Dongkuk Holdings and steel affiliates Dongkuk Steel and Dongkuk CM in 2023, this reacquisition of the building is expected to have a dual effect of strengthening synergy within the group and restoring symbolic assets.
Moreover, by securing core assets within the Central Business District (CBD) based on a stable financial structure, it is expected to reduce risks associated with market fluctuations and anticipate stable rental income and long-term asset value appreciation. The balance payment is expected to be completed in the third or fourth quarter.
Meanwhile, Dongkuk Steel plans to inherit the 'Dongkuk Heritage', which has turned crises into opportunities, and further strengthen its management policy centered on internal stability.

moving@fnnews.com Lee Dong-hyuk Reporter