DL E&C has been reported by Dealbook News to be actively investing and strengthening its bidding activities in the NPL (Non-Performing Loan) business, despite the slowdown in the construction and real estate markets.
DL E&C Strengthens Bidding Activities in NPL Business, Invests in Capstone Fund Anticipating the growth of the NPL market due to the slowdown in construction and real estate, DL E&C has embarked on strengthening its bidding and business activities related to real estate NPLs. The strategy includes establishing a dedicated organization and collaborating with Korea Investment Securities and Capstone Asset Management’s fund to secure construction rights during the restructuring process of prime NPL projects. According to the construction industry on the 22nd, DL E&C has reorganized the private project team within its housing business division into an NPL-focused organization since the beginning of this year. The NPL-focused organization is involved in major NPL project participation.
DL E&C’s recent moves can be interpreted as a strategy to seek stable income generation opportunities in the long term, despite unexpected market volatility and uncertainty. DL E&C, a company established by a spin-off from Daelim Industrial’s construction and plant business division, is counted among the BIG 5 companies in the South Korean construction industry, alongside Samsung C&T Engineering & Construction Group, Hyundai Construction, Daewoo Construction, and GS Construction. This large construction company has created a dedicated organization for the NPL business and continues its cooperation with financial institutions such as Korea Investment Securities and Capstone Asset Management.
DL E&C’s actions reflect its intention to find new growth drivers in the real estate market by securing construction rights through the restructuring process of quality NPL projects. Recognizing the growth potential of the real estate NPL market, the company plans to play a significant role in the normalization of projects by participating as a contractor from the early stages. This is important as the completion guarantee commitment of large construction companies plays a key role in enhancing the possibility of project financing (PF). Additionally, DL E&C’s preparation for entering related businesses through NPL fund investment commitments since the latter half of last year suggests a strategic investment decision based on experience and expertise in the field.
Furthermore, the recent rise in delinquency rates in the secondary financial sector, leading to the acceleration of NPL resolution and PF project restructuring, appears to provide DL E&C with additional opportunities in the NPL business. This decision is influenced by DL E&C’s experience of participating in NPL businesses and achieving successful profits after the global financial crisis, despite the high risk involved in investing in this field.
In particular, DL E&C’s successful sale of the contract construction site in Soonhwa-dong, Jung-gu, Seoul, to AIA Life is cited as a case that proves the potential of the NPL business. This successful case demonstrates that DL E&C has accumulated expertise and experience in the NPL business, laying the foundation to create new business opportunities.
In conclusion, DL E&C’s active investment and bidding activities in the NPL business demonstrate the company’s strategic approach to finding new growth opportunities amidst the uncertainties of the real estate market. This can be seen as part of the effort to strengthen the company’s profitability and stability in the long term and to build a diverse business portfolio capable of effectively responding to market volatility.
