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Empyrion KR1 Seoul successfully reaches financial close

Major Korean lenders provide syndicated loans for Gangnam DC construction

April 10, 2023 at 8:00:00 AM

10 April 2023, Seoul, South Korea - Seraya Partners’ portfolio company, Empyrion DC Pte. Ltd. (“Empyrion DC”), announced today that it has reached an agreement with three major Korean financial institutions, including KEB Hana Bank and Hana Capital Co Ltd, to finance the construction of Gangnam Data Centre (“GDC”) (“Financial Close”). This syndicated loan was arranged by KEB Hana Bank and Hyundai Asset Management Co., Ltd.

Located in Seoul, South Korea, GDC is Empyrion DC’s second data centre project. It is the first data centre to be constructed in the Gangnam district in the last decade. GDC will house a 29 MW IT capacity green data centre, utilising state-of-the-art cooling technologies, and on-site rooftop and building integrated solar photovoltaics.

The syndicated loan will be used for the construction of building core and shell, installation of mechanical, electrical, and plumbing systems, and other capital costs. Construction will commence immediately following Financial Close, with an expected ready-for-service date in H1 2025.

This Financial Close marks a major milestone for both, Empyrion DC and the Korean financing industry as the latter gradually recovers from the liquidity crisis triggered by the selloff in the Korean bond market. Lenders today are therefore highly selective in deploying debt – they deploy debt only on the most financially sound projects.

GDC earned the confidence of its lenders due to its experienced management team on the ground and strategic location, which gives it a strong competitive advantage to meet both hyperscale and enterprise customer demand in Seoul’s current, supply-starved data centre market.

In January 2023, Empyrion DC entered an Engineering, Procurement and Construction ("EPC”) contract with Daewoo Engineering & Construction Co., Ltd., one of South Korea’s largest construction companies. This EPC contract is a fixed price lump sum contract protecting Empyrion against inflation and increasing construction costs.

In February 2023, Empyrion successfully executed a Memorandum of Understanding with Sejong Telecom Inc (“Sejong”), the leading local telecom operator in South Korea. Sejong plans to host their national internet backbone network at GDC. Having the support of a major anchor partner like Sejong speaks volumes of GDC’s attractiveness.

“This Financial Close is a key milestone for GDC, as it brings us closer to being ready-for-service for our customers. We look forward to GDC, helping alleviate the data centre supply shortage in the greater Seoul area,” said Mark Fong, Chief Executive Officer of Empyrion.

James Chern, Managing Partner and Chief Investment Officer of Seraya Partners, commented, “We are incredibly proud to see the GDC project achieve Financial Close in spite of the challenging market conditions. It showcases the strength of our team to deliver a top-quality data centre ahead of the competition.”

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