Korea Commission on Human Rights: "Korean Air Expected to Receive Payment for Songhyeon-dong Site Sale Within the Year"

"Expectations for Korean Air's Implementation of Self-Help Measures to Overcome Liquidity Crisis"

View of the Songhyeon-dong park development site as seen from Twin Tree Tower in Jongno-gu, Seoul, last April. (Image source - Yonhap News)

[Sejong=Asia Economy Reporter Moon Chaeseok] The Anti-Corruption and Civil Rights Commission announced on the 30th that since Korean Air decided on the exchange site for the Songhyeon-dong land through a third-party contract method with Seoul Metropolitan Government and Korea Land and Housing Corporation (LH), it is expected to receive the land sale payment within this year.

The Commission explained that according to the 'Korean Air Songhyeon-dong Land Sale Adjustment Plan' it supervised in April, a provisional agreement was reached on the 18th between Seoul City and LH to exchange the city-owned land for the 'former Seoul Medical Center (south side) site.' Earlier, on March 31, the Commission had submitted the adjustment agreement signed by Korean Air, Seoul City, and LH to the plenary committee on April 26 for final confirmation and granted it legal effect.

The agreement finalized through the Commission's confirmation included ▲a third-party contract method involving LH, which requires housing supply land, ▲a price determination method for the Songhyeon-dong land based on the arithmetic average of four appraisal firms recommended two each by Seoul City and Korean Air, and ▲a payment method where 85% of the sale price is paid within two months from the contract date, and the remaining balance is paid after exchanging the city-owned land, according to the Commission.

According to the Commission, the core of the adjustment?the third-party contract method?was for LH to purchase the Songhyeon-dong land and exchange it with city-owned land held by Seoul City. Among these, deciding on the exchange city-owned land was the biggest challenge. Without determining the exchange site, setting the contract date or payment schedule would be meaningless. This caused a delay in the adjustment last year, and the adjustment could only be completed in April this year.

With the exchange city-owned land for the Songhyeon-dong site decided as the south side of the Seoul Medical Center, Korean Air will be able to sign a sales contract with LH for the Songhyeon-dong land and receive the sale payment within this year. A Commission official said, "We expect the self-rescue plan to overcome Korean Air's liquidity crisis to be implemented." However, the land subject to the exchange must be finalized after follow-up discussions such as appraisal and ownership transfer between Seoul City and LH, as well as approval from the Seoul City Council and LH Board of Directors, and the exchange contract will be made thereafter.

Jeon Hyun-hee, Chairperson of the Anti-Corruption and Civil Rights Commission, said, "The adjustment related to the Songhyeon-dong land was significant in that it not only supports an airline company facing an unprecedented crisis due to COVID-19 but also provides an opportunity to develop Songhyeon-dong, which has historical and cultural value, into a space for citizens," adding, "I hope the remaining administrative procedures proceed quickly and that the contents of the adjustment agreement are faithfully carried out."

This content was produced with the assistance of AI translation services.