Gyeonggi Housing and Urban Development Corporation and Pyeongtaek Urban Development Corporation Notify Preferred Negotiation Partner of Business Agreement Termination for Hyunduk District Development Project

[Suwon Ilbo=Park No-hun Reporter] The Gyeonggi Housing and Urban Development Corporation (GH) and Pyeongtaek Urban Development Corporation notified the Daegu Bank Consortium, which had been selected as the preferred negotiation partner for the Pyeongtaek Hyunduk District development project, of the termination of the business agreement on the 12th and 18th respectively, citing reasons including failure to submit the business agreement performance guarantee.

Gyeonggi Province (Gyeonggi Economic Free Zone Authority) recruited private operators to promote the Hyunduk District development project using a public-private joint development method, and in December 2020 selected the Daegu Bank Consortium, comprising seven corporations including Daegu Bank, as the preferred negotiation partner to proceed with the project.

In February 2021, the Gyeonggi Housing and Urban Development Corporation (GH) and Pyeongtaek Urban Development Corporation signed a business agreement with the Daegu Bank Consortium and agreed to submit a guarantee equivalent to a 12.9 billion won business agreement performance deposit.

The Gyeonggi Housing and Urban Development Corporation (GH) and Pyeongtaek Urban Development Corporation received the first guarantee (6.9 billion won) and proceeded with negotiations for shareholder agreement execution for establishing a project promotion company (PFV).

However, the Daegu Bank Consortium failed to comply with the key terms of the business agreement dated February of last year: 'announcement of compensation plan and commencement of compensation negotiations for the first and second half of 2021' and 'submission of second business agreement performance guarantee (6 billion won) (end of 2021)'.

The Gyeonggi Housing and Urban Development Corporation (GH) notified the Daegu Bank Consortium on two occasions in December of last year that it constituted 'grounds for agreement termination due to non-compliance with conditions,' but the conditions were not met.

Accordingly, the Gyeonggi Housing and Urban Development Corporation (GH) and Pyeongtaek Urban Development Corporation notified the Daegu Bank Consortium, the business agreement counterparty, of 'business agreement termination' on the 12th and 18th respectively, and informed the Gyeonggi Economic Free Zone Authority of this fact.

Upon receipt of business agreement termination documents from the two public sector agencies, the Gyeonggi Economic Free Zone Authority plans to review whether to cancel the preferred negotiation partner selection.

Additionally, the plan is to work closely with related agencies including Pyeongtaek City to explore future promotion directions for the Hyunduk District development project.

Meanwhile, the Hyunduk District development project is being promoted on a scale of 2.316 million square meters in the Jangsu-ri and Kwangwan-ri areas of Hyunduk-myeon, Pyeongtaek City, with plans for the Gyeonggi Housing and Urban Development Corporation (30%+1 share) and Pyeongtaek Urban Development Corporation (20%) to participate and divide equity with a private operator (50%-1 share) to proceed with the project.