Mohegan Gaming & Entertainment says it is confident it can secure the final piece of funding it needs to complete construction of its Korean integrated resort project, Inspire Korea, within the next three months.
Providing an update for investors during the company’s earnings call for the three months to 31 December 2020, Mohegan confirmed that construction on the US$1.6 billion first phase has “slowed down materially” while it closes financing from certain “blue chip” Korean institutions.
The situation has also been impacted by the latest COVID-19 situation in South Korea which has seen businesses across Greater Seoul, including Incheon, either closed or severely limited in 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.”
Mohegan revealed during its previous earnings call that the opening of Inspire Korea has been delayed from 2022 until early 2023. It was also revealed in November that the company plans to bring forward US$200 million worth of investment originally planned for Phase 2 in order to expedite development work as a result of recent delays.
Mohegan outlined in 2019 that the US$1.6 billion construction cost would include US$300 million from its own coffers plus US$900 million from a consortium of “blue chip” Korean institutions, US$200 million worth of infrastructure and improvements by Incheon International Airport Corp and US$200 million via loans.
When complete, Phase 1 of Inspire Korea – sitting on land covering almost 4.4 million square meters near Incheon International Airport – will cover 1.6 million square meters and include 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% 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.