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| ▲ This file photo shows an entrance to Legoland Korea Resort in Chuncheon, east of Seoul. (Yonhap) |
Gangwon gov't-debt crisis
Gangwon Province to repay Legoland Korea developer's debtby Dec. 15
CHUNCHEON, South Korea, Oct. 27 (Yonhap) -- The Gangwon provincial government said Thursday it will fulfill its debt payment guarantee for the developer of Legoland Korea Resort by mid-December, over one month earlier than scheduled, to mitigate impact on the local financial market.
Chung Kwang-yeol, deputy governor of Gangwon Province, announced that his government will repay a debt of 205 billion won (US$145 million) by Dec. 15 owed by the provincial government-funded Gangwon Jungdo Development Corp. (GJC) to build the Legoland theme park in Chuncheon, 85 km east of Seoul.
"The Gangwon government and the finance ministry have been closely discussing effective ways to alleviate the burden on the financial market, including creditors," Chung said in a news conference.
"As a result, we've decided to repay the full amount of the debt guaranteed (for GJC), 205 billion won, by Dec. 15," he said, adding the decision was the outcome of close consultation between Gangwon Gov. Kim Jin-tae and Finance Minister Choo Kyung-ho.
GJC, 44 percent owned by Gangwon Province, established a special purpose company called Iwon Jeil Cha in 2020 to fund the construction of Legoland Korea Resort. But Iwon Jeil Cha failed to repay 205 billion won in asset-backed commercial paper and was listed as bankrupt on Oct. 4, shaking up the local corporate debt market.
Gangwon Province had guaranteed the commercial paper's payment, but said on Sept. 28 that it would file for GJC's bankruptcy.
In an apparent change of stance, Gov. Kim announced recently that his government will carry out its GJC-related debt guarantee by Jan. 29, 2023, but financial market jitters have not subsided.
Meanwhile, Legoland Korea Resort, which opened on May 5 this year, said it will cease operations for three months, beginning next January, for the purpose of wintertime maintenance. But the resort said the temporary closure is not related to the ongoing debt crisis of GJC.
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