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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] CJ ENM is injecting an additional 200 billion KRW into CJ Live City, which has faced setbacks with its K-Culture Valley complex development project.
According to a filing with the electronic disclosure system on Wednesday, CJ Live City announced that it had decided to issue new shares worth 200 billion KRW through a third-party allocation. The largest shareholder, CJ ENM, will acquire 100% of the newly issued shares. This follows a similar capital injection of 98 billion KRW from CJ ENM in September of last year.
CJ ENM established CJ Live City in late 2015 by investing a 90% stake. The project, a large-scale national initiative in collaboration with Gyeonggi Province, aimed to build a 100,000 pyeong (326,400㎡) K-content experience complex in the Janghang-dong area of Ilsan, Goyang. However, the project was halted in July of last year.
The problem lies in the fact that CJ Group had invested over 7 trillion KRW into the project, and by the end of 2023, CJ Live City's outstanding loans amounted to 5.999 trillion KRW, creating a heavy repayment burden. The previous capital injection of 98 billion KRW from CJ ENM was used to repay maturing debt.
Despite a 10.8% year-on-year increase in sales to 3.4434 trillion KRW in the third quarter of last year, CJ ENM recorded a net loss of 556.2 billion KRW. Its cash and cash equivalents stood at 782.7 billion KRW, down 24.2% from 1.0326 trillion KRW at the end of 2023.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
