Mohegan Gaming & Entertainment is ‘optimistic’ that it will secure the funding needed to complete the $1.6 billion development over the next quarter of its Inspire Korea, Korean integrated resort project, adding that it will quickly track $200 million earmarked for the first phase of the project.
Mohegan is asking for a total of US$900m from Korean investors after having put up US$300m of its own, as well as US$200m from Incheon International Airport Corp for infrastructure and US$200m from bank loans.
‘Optimistic of finalising funding’
Chris Jones, Mohegan’s Vice President of Corporate Finance, reported that the development of the first phase of the resort had “materially slowed down” due to the impact of the global pandemic, but was optimistic of finalising funding from Korean companies’ blue chip.
Mr Jones said: “We are getting into a lot of long-form documentation at this point. 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.”
A five-star hotel with 1,256 suites, a 15,000-seat stadium, conference halls, and a casino only for foreigners will be included in the first phase, costing $1.29 billion in construction costs. There will be 150 table games and 700 slots on the gaming floor. A hemispherical dome of over 48,000 sq. will also be present. With rides, dining and shopping, ft. of climate-controlled indoor pool space.
A Paramount Picture-branded theme park scheduled to open in 2025 will be included in the second process. Until 2031, the fourth and final process will not open up.
The announcement came during a call from an investor about the financial performance of the US operator in its first fiscal quarter ended 31 December 2020.
In Uncasville, Connecticut, Mohegan Sun Pocono in Plains Township, Pennsylvania, and the MGE Niagara Resorts in Niagara Falls, Canada, Mohegan Gaming runs Mohegan Sun. Various closures dictated by the global pandemic saw net sales dropping from $399.1m in the previous year period to $230.8m, representing a decline of 42.2 percent.
Broader industry recovery
The President and Chief Executive Officer of MGE, Mario Kontomerkos, said: “As we move through the early part of 2021, we have an eye on a broader industry recovery and I am confident in MGE’s position to benefit from it.
“Performance in the fiscal first quarter was challenging as COVID cases climbed substantially in virtually all of our markets, but the pressure we observed on our revenues and profitability largely began to reverse itself in late December with positive momentum observed throughout January, most notably at Mohegan Sun.
“Despite these challenges, adjusted EBITDA margin at the flagship property grew versus the prior-year quarter, reflecting the permanence of significant cost reduction efforts undertaken over the last year.
“Subsequent to the end of the quarter, MGE successfully completed its refinancing which extended our nearest maturities, increased our financial flexibility, and provided us with ample liquidity as we move forward.
“We remain quite positive that our business has been optimised to benefit from what we foresee to be significant pent-up demand for leisure consumption in the months ahead.”