Mohegan Tribal Gaming Authority, developer of the Inspire casino resort in South Korea, said in a Tuesday statement it does “not believe” that a “change-of-control pursued by Bain Capital is in the best interests of the property, its team members and customers, other lenders and various key stakeholders”.
On Monday, United States-based private investment firm Bain Capital said in an emailed reply to GGRAsia that it had taken over the operations of the Inspire property (pictured), which had launched non-gaming in November 2023, and its foreigner-only casino in February last year.
GGRAsia has approached Bain Capital seeking comment on the Tuesday statement from Mohegan.
A separate Monday release from Inspire – an announcement that did not include the Mohegan brand in the property’s name – appeared to affirm that Bain Capital had assumed operations of the resort, “as the result of Bain Capital’s exercise of its rights to take control of MGE Korea Ltd, the parent company of Inspire”.
Tuesday’s statement from Mohegan said: “Despite near-term hurdles that are common in new resorts of this scale, Mohegan believes we put the essential components in place for long-term success and the property needs more time to achieve its full potential.”
It added: “While Mohegan did not satisfy certain financial covenant tests, we have not missed a payment of principal or interest. Specifically, the loan held by Bain Capital does not mature until May 2027, with no principal payments due before the maturity date.”
Mohegan said it had made “several good faith proposals for amending the financial covenants that are consistent with market precedents.”
It added: “Bain Capital has dismissed those proposals and provided counterproposals that would result in Bain Capital receiving large payments ahead of other Inspire lenders.”
The casino firm stated: “We have been and will continue to attempt to negotiate in good faith with Bain Capital to find a mutually agreeable solution that allows us to be continuing partners with the people of [South] Korea and our various stakeholders.”
In mid-January, Mohegan Tribal Gaming Authority said its South Korea business was facing challenges with meeting some performance targets related to debt covenants, but gave assurances those hurdles were “not related” to any “failure to meet our payment obligations at Inspire”.
As of December 31, the company’s Korea Term Loan had a face value of just over US$460.7 million, and a book value of just under US$436.9 million. The maturity date on the loan was 2027.
Mohegan outlined in its fiscal first quarter results for the period ending December 31, issued last week, that MGE Korea Ltd is a wholly-owned subsidiary of the group, and the parent company of the Inspire property.
Also as of December 31, the group had a Korea Credit Facility maturing this year, with a face value of US$685.9 million, and a book value of US$669.5 million.
