이 기사는 2021년 08월 11일 08:01 thebell 에 표출된 기사입니다.

CJ LiveCity, a subsidiary of CJ ENM, has entered into a detailed discussion to raise funds before start constructing the concert hall Arena.

In 2015, CJ Group was selected as a company to execute the K-Culture Valley project conducted by the Gyeonggi Province and CJ LiveCity is handling the project.

According to the company's audited report, CJ LiveCity is involved in the development and operation of concert halls and facilities like hotel and theme zones on the more than 300,000 square-meter site located in Goyang, Gyeonggi Province.

But the project has gone through setbacks since its launch as the company had to keep changing the purpose of the business, causing four years of delay.

CJ LiveCity said it received an approval from Gyeonggi Province in June on its construction of a 20,000-seat concert arena. The company plans to start the construction within this year.

It also plans to start construction of other facilities as soon as it gets building permit to complete the construction by 2024.

As of the end of 2020, CJ LiveCity’s capital increased to 10 billion won ($8.7 million) from 40 million won in 2015, but the delay of the project resulted in a spike in its debt ratio to 510.56%. Its net borrowings, excluding cash-equivalent assets, amounted to 294.5 billion won. It extended short-term debts of 59.9 billion won and borrowed 30 billion won from its parent CJ ENM in 2020 alone.

CJ LiveCity is reportedly in desperate need of additional funding not only from its parent but from outside investors ahead of the start of the construction. This seems to be a reason that its parent CJ ENM directly mentioned its plan to attract private equity firms and strategic investors to finance CJ LiveCity during its conference call last week.

This means that CJ ENM is even mulling a plan to attract strategic investors and let them participate in the CK LiveCity’s decision-making process in order for the successful fundraising.

CJ ENM plans to make fresh investments worth 5 trillion won in the next five years, some of which will be put into the project, according to CJ LiveCity. (Reporting by Seon-ho Kim)