SEOUL, KOREA - Kolon Group has put a service area in Deokpyoeng out on the market. Macquarie Asset Management, a Korean unit of Australia's Macquarie Group, is currently negotiating terms with Kolon with no other competing bidders. According to investment banking sources on September 15, Kolon Group has selected Hana-Daetoo Securities as an underwriter for the deal and is in talks with Macquarie Asset Management.
The group is likely to keep the management of the service area even after it sells off the ownership to the Australian investment firm under a sale-and-leaseback arrangement. Kolon Global holds the management right to the service area until the year 2029.
Opened on April 20, 2007 on the eastbound Yeongdong Expressway near the junction between the Yeongdong Expressway (No. 50) and the Jungbu Expressway (No. 35), Deokpyoeng Service Area is the largest highway rest area in terms of sales revenue of its stores and restaurants. Last year, it posted sales of 55.1 billion won with visitor numbers reaching 12.24 million. Its sales revenue is more than twice higher than that for runner-up Haengdam Service Area on the West Coast Expressway.
The main reason Kolon Group wants to sell the cash cow is to pay down the debt of Kolon Global, which holds the 100-percent stake in the rest area. Once it can sell the property, the company will be able to secure 90 billion won in cash, which is adequate enough to improve its financial standing. For Macquarie Asset Management, this is a second time to acquire a large highway rest area following the purchase of the service area in Haengdam Island from Citigroup last year at the cost of 125 billion won.
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