The 'Global Marine Tourism Complex' project, named 'World Hanchang Dream Island,' which aims to create an international tourism complex on the Incheon Yeongjongdo dredged soil dumping site equivalent to the size of Yeouido, has experienced a loss of entitlement (EOD). Despite the government's active cooperation, including multiple extensions of the completion date, it was unable to overcome the difficult conditions such as a downturn in the construction market and financing bottlenecks. The project, spearheaded by Hanchang Group Chairman Hanchang Woo, is valued at 2 trillion won.
According to ChosunBiz reporting on the 12th, the 'World Hanchang Dream Island,' which was undergoing a port redevelopment project at the Incheon Yeongjongdo dredged soil dumping site, has recently encountered reasons for a loss of entitlement. This is due to a failure in land sales that were promoted last June. A loss of entitlement refers to a situation where a borrower fails to repay, prompting financial institutions to recover the loans before maturity. Hanchang Dream Island plans to secure funding by putting some of the land for sale for transaction.
A representative of Hanchang Dream Island noted, "After completing the land development project, a loss of entitlement occurred due to difficulties in securing funding, and we are planning follow-up actions. We have decided to put some of the land for sale for transaction as a priority."
This project is essentially a port redevelopment project promoted by the Ministry of Oceans and Fisheries. The Ministry accepted the plan proposed by Hanchang Dream Island, a corporation funded by Hanchang Group Chairman Hanchang Woo and others. The Ministry and Hanchang Dream Island signed an agreement in 2014. Hanchang Dream Island plans to invest 2.0321 trillion won into the Yeongjongdo dredged soil dumping site (3.327 million square meters) to develop a water park, aquarium, luxury hotel, shopping complex, golf course, and other marine recreational facilities. A dredged soil dumping site is an area used to pile up or dispose of sand that comes out when deepening a water depth for constructing ports and is typically utilized for port facilities or waterfront spaces.
The financial difficulties faced by Hanchang Dream Island have been apparent for several years. Initially, the land development project was set to conclude by September 2022, but it was only completed in March 2024. The Ministry postponed the completion multiple times during this process. However, this was still significantly delayed from the original plan. In 2014, when the Ministry signed the agreement, there were plans to develop all facilities on the land by 2021. This year, in the 11th year of the agreement, the only completed site is the 'Berhill Yeongjong Golf Club (CC),' which is scheduled to open at the end of this month.
According to data released by the Financial Supervisory Service, Hanchang Dream Island reported a net loss of 11.36 billion won at the end of 2023, with cumulative deficits reaching 37.075 billion won, and a liability ratio of 428%. The auditor stated in the audit report, "There are significant delays in the main business, such as land sale for completion, due to continuous bottlenecks in the PF market and rising benchmark interest rates. There may be events or situations that raise significant doubts about the company's ability to continue as a going concern."
A representative from the Incheon Economic Agency stated, "Currently, the Ministry of Oceans and Fisheries is conducting completion inspections (related to land development) following the completion of the project." They added, "The inspection will be finalized once the handover of facilities is completed."
The Hanchang Dream Island consortium consists of a total of 41 financial institutions and is considered a 'special purpose company (SPC).' A representative from Mirae Asset Securities, the lead underwriter for the consortium, stated, "We are currently preparing a plan for the recovery of funds."
The Ministry of Oceans and Fisheries believes that now that the land development work is completed, if sales and transactions proceed well, the project could be finalized even if delayed. Hanchang Dream Island has completed the reinforcement of weak ground and the establishment of infrastructure such as roads, parks, and green spaces. Additionally, the 'Hanchang IC,' allowing access in and out towards Seoul, has also been constructed.
A representative from the Ministry of Oceans and Fisheries remarked, "This was a project aimed at enabling private enterprises to create infrastructure and turn land into usable space through the port redevelopment project." They concluded, "Now that the IC has been developed, we believe that investment is likely if economic conditions improve."