South Korea's state-run railroad operator on Friday offered 260 billion won (US$234 million) in emergency funds to salvage the country's largest urban development project should investors accept a package of measures to normalize it.
The development plan calls for the construction of a 111-story skyscraper, high-rise commercial buildings, apartments, luxury hotels and a shopping complex in Yongsan, central Seoul, transforming it into an international business hub by 2016. However, the 31 trillion won project is now teetering on the brink of collapse due to a funding dispute and a prolonged property slump.
Chung Chang-young, chief executive officer of Korea Railroad Corp. (KORAIL), the biggest shareholder of Dreamhub Project Financing Vehicle Co. with a 25 percent interest, made the offer to the 29 companies involved in the project during an emergency meeting at KORAIL's headquarters in Seoul.
Dreamhub Project Financing Vehicle Co. is a special purpose company created for the urban development project.
"KORAIL will do whatever it takes to avoid the collapse of the project and put the project back on track," Chung told local builders and other investors.