Unichem in talks to recover 31 billion won tied up in a golf course ... “Equivalent to 53% of market cap” [fn Market Watch]

[Financial News] Unichem is seeking to recover about 31 billion won in loan principal previously put into a golf course project. The move would recover funds tied up in the golf course and convert them into cash that the company can use directly.
If the recovery is completed, Unichem would secure cash exceeding half of its current market capitalization, expanding its options for financial management, including repaying borrowings and securing operating funds.
According to investment banking (IB) industry sources on the 28th, Unichem is discussing a plan with Uni Golf & Resort, operator of Cascadia CC, to receive the loan principal in a lump-sum repayment. A final repayment agreement has not yet been signed. The specific timing and terms of the recovery will also be finalized after further discussions.
Cascadia CC is a luxury 27-hole golf course located in Hongcheon, Gangwon Province. It targets premium golf demand with courses themed around stone, trees and water, waterfall views, and upscale accommodations.
The key to the discussions is recovering the funds invested in the golf course project. Even if a loan remains on the books as an asset, it is difficult to use for other purposes until the money is actually received. If the principal is repaid in a lump sum, Unichem will be able to decide how to allocate the funds according to its business needs.
Using the recovered funds to repay borrowings could reduce debt and interest expenses. Securing them as operating funds could help reduce reliance on external financing. However, the specific uses for the funds have not been confirmed.
Recovery of the principal and settlement of interest claims are separate matters. Interest receivables, in addition to the approximately 31 billion won in principal, are subject to separate recovery talks. The total cash inflow will depend on the respective repayment terms and the actual payments received.
Ultimately, the key factors are the timing of the recovery and how the funds are reallocated. The extent of the financial improvement is expected to depend on how Unichem allocates the funds—after securing liquidity through principal recovery—between reducing borrowings and running its business.
A source in the IB industry said, “Recovering a loan means turning an asset on the books into cash that the company can allocate directly,” adding, “If a lump-sum recovery is completed, the company will have greater discretion in managing its funds, and how much it subsequently puts toward repaying borrowings will determine the extent of the financial improvement.”
[email protected] Kim Kyung-ah Reporter