Hong Kong-listed real estate developer Lippo Ltd says it is still in talks with U.S.-based casino group Caesars Entertainment Corp for the disposal of Lippo’s stake in a proposed gaming joint venture in Incheon, South Korea.
An exit agreement is unlikely to be reached soon, Lippo said in a Tuesday filing to the Hong Kong Stock Exchange.
In December 2014, GGRAsia reported that a consortium including Caesars Korea Holding Co LLC, a U.S. firm wholly owned by Caesars, and Lippo Worldwide Investments Ltd, a unit of Lippo, had made a conditional deal to acquire land for a casino project at Incheon, for just under US$95.9 million.
The other partner in the LOCZ Korea Corp consortium was reported to be OUE International Holdings Pte Ltd, a Singapore company that is wholly owned by Singapore real estate firm OUE Ltd. Lippo is the latter’s controlling shareholder.
Construction for the unnamed casino project has not yet started, according to several investment analysts covering the gaming sector.
Lippo had announced on August 19 a “memorandum of implementation” for the proposed disposal of the interest in LOCZ Korea owned by Lippo and OUE to a joint venture entity to be formed by Caesars Korea and an unidentified independent third party investor.
In Tuesday’s filing, Lippo stated that, “whilst it was anticipated the exit agreement would be entered into within November 2016, the exit negotiations are continuing, and their outcome is dependent upon a separate set of negotiations between Caesars Korea and the investor.”
Lippo said that, according to company understanding, those negotiations remained “ongoing”.
“Accordingly, it is unlikely that the exit agreement will be entered into this month,” Lippo added.
The real estate developer first announced in March it was considering selling its stake in LOCZ Korea. Lippo said at the time that even if it did decide to divest its interest in the scheme, it could still participate in “certain developments” relating to the project, subject to conditions being agreed.
The Incheon venture was described in a March 2014 filing by OUE to the Singapore Exchange as a KRW855-billion (US$730-million) scheme with gross floor area of more than 150,000 square metres (1.61 million square feet) on a 4.3-hectare (10.6-acre) site.
Gaming for the venue was slated to be managed by Caesars. Gary Loveman, chairman of the firm at the time the deal was announced, had said the company was working to open the resort before the 2018 Winter Olympics, an event due to be held in South Korea.
South Korea currently has 17 casinos, but the country’s nationals are only allowed to gamble at one of them – Kangwon Land in an upland area of Kangwon province.
A total of three large-scale gaming resorts have been announced for Incheon, near South Korea’s capital Seoul. Projects – all reportedly featuring foreigner-only casinos – are: the Inspire Integrated Resort scheme, by U.S.-based Mohegan Tribal Gaming Authority in partnership with South Korean chemicals manufacturer KCC Corp and Incheon International Airport Corp, scheduled to begin operations by 2020; Paradise City, by South Korea’s foreigner-only casino operator Paradise Co Ltd and Japanese pachinko operator Sega Sammy Holdings Inc, to open in April 2017; and the LOCZ Korea project.
South Korea’s Jeju Island recently has also attracted a lot of new gaming-related investment. The semi-autonomous province is already home to eight casinos, all for foreigners only.
On November 11, Singapore casino operator Genting Singapore Plc said it was selling its 50-percent stake in a casino project under construction on Jeju.
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”We committed to the government to provide a full business idea and plan for Phase 1b around 12 months after the casino opens, therefore, probably early 2025”
President of the Mohegan Inspire Entertainment Resort in South Korea