South Korea’s Ministry of Culture, Sport and Tourism has approved a request from Mohegan Gaming & Entertainment for a six-month extension to the deadline to open its Incheon integrated resort, Inspire Korea.
The approval will see Inspire Korea open in the first half of 2023 rather than the original target date of 2022. The Ministry has also approved development of an outdoor theme park, with the revised business plan incorporating “sustainable development and forward-looking strategies given the realistic and practical shifts in the tourism and hospitality industry hard hit by the COVID-19 crisis.”
Andrew Billany, CEO of Inspire Korea, said, “We are thrilled to hear the news of the awaited business plan change approval from the government. We plan to normalize the resort construction shortly and fully dedicate our efforts on securing financing.”
Mohegan said during its 4Q20 earnings call in February that it was confident of securing the final piece of funding it needs to complete construction of Inspire Korea within the coming months, noting that construction on the US$1.6 billion first phase had “slowed down materially” while it closes financing from certain “blue chip” Korean institutions.
The company has previously outlined that the 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.
“Korea is in a very heightened sense of COVID restrictions,” said Mohegan’s Vice President of Corporate Finance, Chris Jones, in February. “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.”
Approval of Mohegan’s six-month extension request comes just weeks after the new owners of nearby Midan City Resort Complex – formerly known as Caesars Korea – had their request for a three-year extension knocked back. They were granted a 12-month reprieve instead.
Mohegan itself this week fareweled one of the driving forces behind its Korean IR, Mario Kontomerkos, who officially stepped down as CEO on Wednesday.
While Kontomerkos has departed, Mohegan last week revealed it was welcoming back former CEO Bobby Soper as its new International President in charge of the company’s Asian expansion efforts in Japan and South Korea.