.5 million for stake
Hong Kong real estate developer Lippo Ltd. has completed its exit from a South Korea casino project at Incheon led by U.S.-based gaming group Caesars Entertainment Corp.
Lippo and an associated business, Lippo Worldwide Investments Ltd., will receive considerations and payments of up to approximately US$23.5 million, the company announced.
In a December 29 filing, Lippo announced it had received “conditional approval” for the move by South Korea’s Ministry of Culture, Sports and Tourism. The firm said it withdrew from the Incheon project “in light of the current outlook for the gaming industry in North Asia and the volatility of the global economy.”
Steven Tight, Caesars president of international development, told GGRAsia in January that the US$700 million development is “currently targeting completion at the end of 2019 or early 2020” and would be “right-sized,” “supportable,” and “without reliance on the Chinese VIP market.”
Concerns about the jurisdiction may have been exacerbated by political tensions between China and South Korea. As of March 15, the Chinese government banned travel groups to South Korea, allegedly in retaliation for South Korea’s approval of a U.S. missile system there, reported the Asia Gaming Brief.
The ban may direct more travel to Macau and also Malaysia, which is about to launch the expansion of its Resort World Genting resort, AGB reported. According to Credit Suisse Group analysts, “We believe Genting Malaysia and Genting Bhd are more geared to the return of Chinese tourism, with the expansion of the casino and the reopening of the theme park in 2017, which may mark the beginning of another leg-up for free cash flows.”
South Korea is the destination for 6 percent of outbound Chinese travelers following Hong Kong, Macau and Thailand. About half of foreign tourists to South Korea are Chinese and 40 percent come as part of tour package deals.
