DL Provides 55 Billion KRW Debt Guarantee for Yeochun NCC via Subsidiary DL Chemical… Financial Burden and Credit Risk Alert

DL subsidiary DL Chemical decided to provide a debt guarantee for 55 billion KRW borrowed by Yeochun NCC from IM Securities' special purpose company SPC. The guarantee amount equals 3% of DL Chemical's equity of 1.847 trillion KRW, with a one-year period starting June 26, 2026.
Yeochun NCC has recorded net losses for three consecutive fiscal years, raising capital erosion concerns. As of the latest fiscal year, assets are 2.9395 trillion KRW, liabilities 2.0784 trillion KRW, and equity 861.1 billion KRW, resulting in a debt ratio of 241%. This additional guarantee raises DL's consolidated contingent liabilities to 2.7025 trillion KRW.
This guarantee supports existing borrowings rather than funding growth, which is not positive from a capital efficiency perspective. The use of an SPC counterparty introduces opacity in credit assessment, warranting cautious investor approach.
[AI Summary]DL's subsidiary DL Chemical provided a 55 billion KRW debt guarantee for Yeochun NCC, lifting the total guarantee balance to 2.7025 trillion KRW. Yeochun NCC's persistent losses and high leverage amplify the guarantee risk, potentially pressuring DL's financial stability. Absent additional capital raising or asset sales, negative implications for shareholder value are expected.