Lotte Construction, DL E&C Face 7.16 Trillion Won Guarantee Liabilities as Homeplus Moves Toward Liquidation

According to Korean credit rating agencies, Lotte Construction and DL E&C face a combined 7.16 trillion won ($5.5 billion) in guarantee liabilities as Homeplus moves toward liquidation on July 7. The two construction firms provided credit enhancements on junior loans tied to Homeplus store acquisition and development projects, creating potential cash outflow obligations if senior lenders declare default.

The guarantee exposure breaks down to 5.738 trillion won for Lotte Construction and 1.425 trillion won for DL E&C. If Homeplus' operations cease, rental income from the stores will stop, leaving project entities unable to service debt interest, which would trigger the construction companies' guarantee obligations. Both companies indicated they possess sufficient liquid assets to manage the risk.