Gangwon-do, "Will Repay Legoland Guarantee Debt by January Next Year"

Budget Proposal for 205 Billion Won Payment Underway
Province's Guarantee Debt Obligation Separate from Rehabilitation Application

Gangwon Province Governor Kim Jin-tae held a press conference on the 21st and announced a repayment plan for the guaranteed debt of Gangwon Jungdo Development Corporation. [Gangwon Province]

[Asia Economy Reporter La Young-cheol] Gangwon Province has decided to fully repay the 205 billion KRW guarantee debt that Gangwon Jungdo Development Corporation (GJC) borrowed for the construction of infrastructure for Chuncheon Legoland by January 29 of next year at the latest.

On the 21st, Gangwon Governor Kim Jin-tae held a press conference regarding the repayment plan for the Gangwon Province guarantee debt on GJC, stating, "As the head of a local government managing the taxes of Gangwon residents, I will do my best until the end to minimize the tax burden on the residents."

He added, "We are currently pushing forward with the budget plan to allocate 205 billion KRW for the payment to fulfill the guarantee debt within this year," explaining, "This is a measure to protect individual investors in the bond market and to resolve uncertainties in the financial market."

He particularly emphasized that the obligation to fulfill the province’s guarantee debt is separate from the rehabilitation application.

Governor Kim said, "The GJC rehabilitation application will proceed as planned," adding, "We are working on practical tasks aiming for a November application and are communicating closely with creditors."

He also stated, "I hope that the rehabilitation application for GJC, which has been engaging in opaque and reckless management, will be accepted so that transparent and efficient asset sales can be carried out."

The province expects that if the rehabilitation process is successfully completed, it will be able to recover more than the amount of guarantee debt already paid.

However, since the plan is to repay the guarantee debt solely with its own budget without issuing local bonds, the budget burden for next year is expected to increase.

Meanwhile, following the announcement of the Jungdo Development Corporation’s rehabilitation application last month, public opinion and market conditions have been unsettled as the ABCP worth 205 billion KRW of I-One Jeilcha, a special purpose company (SPC) established to finance the Legoland construction, was declared in default.

Yoon In-jae, Director of the Gangwon Province Industry Bureau, stated, "Since Gangwon Province clearly announced that it would fulfill the guarantee debt, the government had been observing the situation, but recently central government agencies have sent opinions to Gangwon Province that it would be better to clarify an exact repayment plan."

Meanwhile, it has been suggested that from the time Jungdo Development Corporation borrowed money from BNK Investment & Securities and throughout the subsequent project progress, the Choi Moon-soon administration may have also contributed as another factor increasing the debt burden.

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