Mohegan Gaming & Entertainment (MGE) says it expects to secure the rest of the funds it needs to complete construction of its Incheon, South Korea integrated resort, called Inspire Korea, within the next three months.
The U.S.-based tribal operator updated investors during the company’s recent earnings call, confirming that development of Phase 1 the US$1.6 billion project has “slowed down materially” while the operator closes financing from unnamed “blue-chip” Korean entities.
According to Inside Asian Gaming, the project has been hindered by Covid-19, which has caused businesses across Greater Seoul including Incheon to remain closed or severely limited their operations since late November.
“We are getting into a lot of long-form documentation at this point,” said Mohegan’s Vice President of Corporate Finance Chris Jones. “Korea is in a very heightened sense of Covid restrictions. Even though they have a lower number of cases in that market they are very wary about it, so as a result we’ve seen things slow down.
“But we are optimistic that we will be able to close on the financing over the next couple of months and get construction ramped up again.”
The opening of Inspire Korea has been delayed from 2022 until early 2023. In November, MGE disclosed plans to bring forward US$200 million worth of investment originally planned for Phase 2 in order to expedite development work.
When complete, Phase 1 of Inspire Korea, located on 4.4 million square meters (1,087 acres) near Incheon International Airport. The complex will offer a casino with 150 gaming tables and 700 EGMs, a 15,000-seat arena, an indoor climate-controlled dome with a pool and rides, dining and retail, a 19,000-square meter conference and convention space, and 1,250 hotel rooms.
Mohegan reported a 31.8 percent decline in group-wide net revenues for the December quarter to US$165.9 million and a 30.8% fall in Adjusted EBITDA to US$45.1 million, reported IAG.