[Exclusive] SH Lends Additional 21.4 Billion Won to Hangang Bus… Total Investment Hits 114.1 Billion Won

[비즈한국] An investigation by Bizhankook has confirmed that Seoul Housing and Communities Corporation (SH) provided an additional 21.4 billion won loan to the Hangang Bus operating company late last year. Including the 5.1 billion won in initial capital, SH has now invested a total of 114.1 billion won into Hangang Bus. Since an incident in November last year where a vessel stalled in a shallow section near Jamsil Ferry Terminal, operations on some routes have been suspended. Amid deteriorating financial stability at SH, there is growing concern over the excessive injection of public funds into Hangang Bus.

An investigation by Bizhankook has confirmed that Seoul Housing and Communities Corporation (SH) provided an additional 21.4 billion won loan to the Hangang Bus operating company late last year. A Hangang Bus departing from Mangwon Ferry Terminal. Photo = Reporter Cha Hyeong-jo

According to Bizhankook's reporting and documents from the office of Representative Chae Hyun-il of the National Assembly's Public Administration and Security Committee, SH provided an additional 21.4 billion won loan to Hangang Bus Co., Ltd. last December. The interest rate is 4.6%, and the loan term extends until 2045, the project's end date (20 years from the start of operations). SH decided to support the additional loan as the majority shareholder, determining that the Hangang Bus project faced funding shortages due to rising project and operating costs caused by changes in the external environment, with the goal of ensuring smooth project progress and maintaining financial stability.

To date, SH has poured 114.1 billion won into Hangang Bus. Following the initial capital injection of 5.1 billion won in June 2024, it provided loans of 27.1 billion won in July 2024, 49.5 billion won in November 2024, 11 billion won last April, and 21.4 billion won last December. Excluding the initial capital, the total in loans alone reaches 109 billion won. All were intended to supply liquidity to Hangang Bus. While Hangang Bus is eligible for subsidies from the Seoul Metropolitan Government to cover operational deficits, it has been confirmed that there have been no cases of financial support or capital injections from the Seoul Metropolitan Government, including subsidies, so far.

Hangang Bus is Seoul's first public water transportation system. The Seoul Metropolitan Government first introduced it last September to alleviate severe road congestion and public transit overcrowding during rush hours. It operates as a passenger ferry service covering a total of 28.9 km across seven ferry terminals along the Han River, including Magok, Mangwon, Yeouido, Apgujeong, Oksu, Ttukseom, and Jamsil. The operator, Hangang Bus Co., Ltd., is a joint venture between the Seoul-affiliated SH and E-Land Group's E-Cruise. With stakes of 51% and 49% respectively, the Seoul Metropolitan Government is effectively the majority shareholder.

Hangang Bus suspended some sections of its service following a grounding incident last November. At the time, vessel No. 102 became stuck on the riverbed in a shallow area near the Jamsil Ferry Terminal around 8:00 PM. The cause of the incident was identified as deviation from the course and insufficient brightness of the navigational buoys. Following the incident, Hangang Bus suspended operations between Apgujeong and Jamsil, limiting service to the Magok-Yeouido route. The Seoul Metropolitan Government initially aimed to resume operations in January but postponed the date to March, citing the need for deepening the waterway and conducting safety inspections.

SH's financial stability is on a downward trend. According to its audited financial statements, SH's debt-to-equity ratio rose from 178% in 2023 to 195% in 2024. The total debt of the corporation increased by 2.3167 trillion won, rising from 17.7069 trillion won to 20.0236 trillion won. While a debt-to-equity ratio of under 200% is generally considered stable for typical corporations, exceeding this level is viewed as indicating a weak financial structure. Meanwhile, the corporation's revenue for 2024 was 1.2903 trillion won, a decrease of 9.1 billion won from the previous year, while operating profit increased by 77.6 billion won to 132.7 billion won.

Representative Chae Hyun-il pointed out, "Hangang Bus, which threatens the safety of citizens, is also endangering the financial stability of a Seoul-affiliated organization. Mayor Oh Se-hoon's complete failure, Hangang Bus, should immediately cease operations."