The Gangwon provincial government has pledged to cover the defaulted debt of the municipal-linked developer of Legoland Korea by December 15. 

Jeong Kwang-yeol, the Gangwon vice governor for economic affairs, said on Thursday that the decision to pay off the debt incurred by the Gangwon Jungdo Development Corporation(GJC) was made in consultation with Gangwon Governor Kim Jin-tae and finance minister Choo Kyung-ho.

The government of Gangwon Province will repay the debt of 205 billion won, or 144 million U.S. dollars over a month earlier than the January 29, 2023 deadline promised by the governor last week.

Iwon Jeil Cha, a special purpose company(SPC) set up by the GJC to fund the resort project, failed to make the debt payment by September 29, and was listed as bankrupt earlier this month.

Neither the GJC nor the provincial government, which secured the SPC's debt, fulfilled their payment guarantee, creating a liquidity crunch in the nation's corporate bond and commercial paper markets.

Earlier this week, the central government said it would expand the provision of liquidity to over 50 trillion won in hopes of easing market anxiety.