The Ministry of Public Administration and Security approved the conditional approval of 75.2 billion out of 100 billion applications\n Unable to repay loans at Jinhae Ocean Resort\n Construction and Changwon City directly take over the construction due to the failure of the public offering of the business operator\n Infrastructure maintenance and rest of the site development
사진 확대 A panoramic view of the Ungdong District 1 development project under construction on 2.25 million square meters of landfill in Jedeok-dong, Jinhae-gu, Changwon-si, Busan Jinhae Free Economic Zone./Yonhap News/
As Gyeongnam Development Corporation received approval to issue public bonds, the issue of the golf course in Ungdong District 1 has been delayed. The Ministry of Public Administration and Security conditionally approved the issuance of construction bonds applied by the corporation, opening the way for the corporation to directly secure the right to operate the golf course.
According to the Gyeongnam Provincial Government and the Gyeongnam Development Corporation on the 19th, the Ministry of Public Administration and Security reviewed the 100 billion won bond issuance plan applied by the Gyeongnam Development Corporation the previous day and approved it by adjusting the issuance scale to 75.2 billion won. Instead, it was conditioned to submit a long-term golf course use plan. The corporation plans to issue bonds through the financial sector within this month after completing the submission of the plan.
The approval came at a time when Jinhae Ocean Resort, which has been running a golf course, is nearing the end of this month when the deadline for repayment of KRW 10.9 billion in loans that have not been paid back to the lenders is around the end of this month. As Jinhae Ocean Resort lost its repayment capacity, joint project implementers Gyeongnam Development Corporation (64% stake) and Changwon City (36% stake) were in a position to pay back loans instead according to the ratio.
When the loan is paid, Jinhae Ocean Resort will completely withdraw from the operation of the golf course and the right to operate will be handed over to Gyeongnam Development Corporation. The corporation plans to quickly proceed with the light transfer process and the handover to take over the operation without interruption. After that, the corporation plans to repay the bonds by operating the golf course directly to make profits or by selecting a new rental operator and receiving rent every year.
The Gyeongnam Development Corporation previously recruited a business operator to lease the golf course for 20 years from July to September, but there were no participants in both contests. This is because Jinhae Ocean Resort’s business feasibility has been lowered due to the condition that it has to pay about 150 billion won, including 18 billion won in principal and interest of loans and infrastructure installation costs, such as construction costs used for the construction of golf courses. When the public offering of the operator was virtually canceled, the corporation turned to issuing public bonds directly to recover the right to operate.
The Ungdong 1 district development project is a tourism and leisure complex under construction on 2.25 million square meters of landfill in Jedeok-dong, Jinhae-gu, Changwon-si, within the Busan Jinhae Free Economic Zone. Gyeongnam Development Corporation and Changwon City signed an agreement with Jinhae Ocean Resort in 2009 to promote the project in a structure in which the private sector constructs and operates golf courses (stage 1) and recreational and cultural facilities (stage 2). However, Jinhae Ocean Resort did not carry out the remaining facility construction plans after completing the 36-hole golf course in 2017.
The Gyeongnam Development Corporation plans to repay the loan with construction bonds and reorganize insufficient infrastructure such as green areas and roads with the remaining funds and promote the development of remaining sites excluding golf courses by attracting private investment.
