GGRAsia – Mohegan Sun buying out partner in S. Korea scheme

Mohegan Sun buying out partner in S. Korea scheme

May 04, 2018 Newsdesk Latest News, Rest of Asia, Top of the deck

Mohegan Gaming and Entertainment, a U.S. casino operating entity commonly known as Mohegan Sun, said in a Thursday statement that it had reached an “amicable” agreement to buy out its local partner in a South Korean casino project. The announcement coinciding with the release of the firm’s fiscal second-quarter earnings.

The consideration involved in the arrangement was not mentioned in the press release. The partner was also not mentioned by name.

As of last year, South Korean chemicals manufacturer KCC Corp had been described as a consortium partner in the scheme, called “Inspire” (pictured in an artist’s rendering). The project is located near to Incheon International Airport, the main air hub serving the South Korean capital Seoul.

KCC Corp said in November 2015 it had acquired a 24.5-percent stake in Inspire Integrated Resort Co Ltd, the South Korean entity developing the Inspire project.

“During the quarter, we reached an amicable agreement to purchase our South Korean partner’s stake in Project Inspire, thereby bringing Mohegan Gaming and Entertainment’s ownership in the project to 100 percent and furthering our diversification efforts in Asia, the world’s fastest-growing major gaming and entertainment market,” Mario Kontomerkos, chief executive of Mohegan Sun, was quoted as saying in the release.

In a March interview with a newspaper in the U.S., Mr Kontomerkos had talked of hoping to see ground breaking on the South Korea scheme this year. During a February earnings call, he had mentioned “ground breaking and financing some time during the middle of 2018”.

The March interview report also referred to a first-phase opening for the South Korea resort in “about 2021” although it didn’t quote Mr Kontomerkos directly on that point. In February the executive had given guidance the group was targeting a first-phase launch by 2021.

For the second quarter, Mohegan Sun reported net revenues of US$332.0 million, a 1.4 percent decrease from the second quarter of fiscal 2017. Gaming revenues in the latest reporting period were US$288.7 million, a 1.7 percent year-on-year decrease.