‘K-Culture Complex’ CJ LiveCity, Bridge Loan Extension Due to Project Delays

CJ LiveCity, the developer of a large-scale complex cultural facility in Goyang City, Gyeonggi Province, has extended a bridge loan of 100 billion KRW borrowed for commercial facility development. Since purchasing the land with the bridge loan in 2018, the project has faced long-term delays, resulting in multiple loan extensions and changes to financial terms. Although the government intervened to mediate the conflicting interests, the worsening project conditions, such as rising construction costs, have made it uncertain when construction can actually resume.

CJ Live City Expected Bird's-eye View

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According to the investment banking (IB) industry on the 8th, CJ LiveCity extended the maturity of the 100 billion KRW bridge loan yesterday, with Kiwoom Securities acting as the lead manager. The existing loan, which was due, was repaid, and the loan was extended again for two years until March 2026. Kiwoom Securities provided a credit facility agreeing to take responsibility for any unpaid debt on behalf of CJ LiveCity if principal and interest repayments are not properly made.

CJ LiveCity is a K-content experiential complex development project promoted by CJ Group since 2015. It was established through investments from CJ ENM and others for a mega development project in Janghang-dong and Daehwa-dong, Ilsandong-gu, Goyang City, Gyeonggi Province. The project involves constructing the largest performance hall in Korea (total floor area of 110,836㎡) capable of accommodating 20,000 people indoors from basement level 1 to 5 floors above ground, and over 40,000 people outdoors, along with commercial, lodging, office, and tourism facilities on a 326,400㎡ site. The total project cost is approximately 3.2 trillion KRW.

Hanwha took charge of construction, which began in October 2021. According to the plan, construction was scheduled to be completed in the second half of this year. However, construction was halted in April last year due to COVID-19 and power supply issues. Meanwhile, rising interest rates and construction costs caused friction between Gyeonggi Province and the developer.

In October last year, the Ministry of Land, Infrastructure and Transport held a 'Private Joint Mediation Committee' and proposed a mediation plan. It recommended that Gyeonggi Province support cost reduction and liquidity securing measures for the private developer. This included exempting property tax by utilizing undeveloped land for public use and cooperating in issuing land sale return bonds to strengthen liquidity. The plan also suggested extending the completion deadline and reducing delay penalties. However, since Gyeonggi Province rejected the mediation plan, there has been no progress in the project.

The bridge loan whose maturity was extended this time was the first loan CJ LiveCity borrowed in 2018 for commercial area development. As the project has been delayed for six years, the loan maturity has been continuously extended. According to the bridge loan investment memorandum (IM), the commercial facility land was scheduled to start construction in 2018. It is expected that the bridge loan will continue to be extended until the main project financing (PF) loan is secured in line with the start of construction.

An IB industry insider said, "During the suspension of the project, construction costs and other expenses have risen sharply, making the timing of project resumption uncertain," adding, "Existing loans have no choice but to keep extending their maturities until construction restarts."

A CJ LiveCity representative said, "This bridge loan extension is a routine financing measure, and once the ongoing mediation agreement with Gyeonggi Province is finalized, smooth fundraising including domestic and foreign investment attraction will be possible."

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