Lee & Ko concluded a large scale project finance agreement on January 27, 2010. Second West Coast Highway Corp., established by Halla Engineering & Construction Corp. as the underwriter and eight other companies as investors, entered into an implementation agreement with the government to construct the Pyungtaek-Shiheung Highway. In connection with this Pyungtaek-Shiheung Highway Private Investment Project, Lee & Ko successfully advised the lenders, which included Industrial Bank of Korea and National Agricultural Cooperative Federation as arrangers, in the financing of KRW 793,400,000,000 (KRW 700,000,000,000 senior secured facility and KRW 93,400,000,000 junior secured facility). The Pyungtaek-Shiheung Highway will require investments of KRW 900,000,000,000 until the completion of construction and will connect Pyungtaek and Shiheung, covering a total distance of 42.6km. Once completed, the highway will be valued as a major highway, enhancing efficiency of travel within the Kyunggi Province and drastically reducing distribution costs. The significance of this transaction was that it was completed when most other private investment projects were struggling to obtain funding from financial institutions due to increased risk after the government abolished the minimum revenue guarantee program. There is increased anticipation that this transaction will be a signal for the beginning of funding for other highway projects.
Among the financial institutions involved in this transaction, twelve financial institutions and finance corporations, led by Industrial Bank of Korea and National Agricultural Cooperative Federation, participated as senior lien lenders, while the Investment Syndication Institution (fund) with Consus Asset Management Co., Ltd. as a syndicate investor, participated as the junior lien lender.
Hun Ko and Hyun Soo Kim of Lee & Ko took part in the structuring and negotiation of the financing agreement and participated in the negotiation of the amended implementation agreement with the government, which was a condition precedent provided in the financing agreement, by preparing and organizing all the relevant documents necessary to comply with the financial conditions.