Following Mohegan’s report earlier this month that it is working to introduce non-gaming entertainment to Inspire resorts in South Korea by the end of this year and casinos by early 2024, Mohegan Gaming and Entertainment, an American tribal gaming company run by the Mohegan Tribe, today announced that it has pledged to cash in a total of W185 billion, worth about $142 million, to secure the completion of the Korean integrated resort project Inspire.
This amount can be divided or invested at the same time before September 30, 2023, and will be paid to Inspire Integrated Resorts Co., Ltd., Mohegan’s Korean subsidiary.
Reasons for additional funding:
After securing a total of approximately $1.55 billion in funding to complete the first phase of the upcoming Inspire Entertainment Resort property, the Equity Commission Letter was signed on Feb. 16 confirming the Company’s intention to secure additional funding for the unfinished resort project.
With the project currently at 43% in terms of construction, one of the main reasons for the need for additional investment is ahead of schedule, but more funding is needed to complete it.
In this regard, company officials explained, “The additional funding is to provide Inspire with certain non-diluted equity capital as needed to complete the project with up to 155 billion won ($119 million).”
But that’s not all. The company will also invest up to 30 billion won, amounting to about $23 million, to cover expansion and pre-opening costs if these costs exceed budget size and available emergency funds.
The company’s funding lender has become a third-party explicit beneficiary of the equity investment agreement, so additional contributions may be made if necessary.
In addition, at the same time, Mohegan signed a waiver and consent letter requiring lenders to agree on certain modifications to Inspire Korea’s expansion plans, which include increased project scope and changes to fixed-price construction contracts to cover higher inflation costs.
In terms of investment, Mohegan signed a contract with Hanwha Hotel Group in early January, which intends to operate three five-star hotel towers at its future resort.
The company agreed to do so in exchange for an additional $80 million “lower investment.”
The layout of the upcoming Mohegan Inspire:
The new resort will consist of three hotel towers, an arena, a foreigner-only casino, a restaurant, retail, convention and entertainment facilities, a year-round water dome experience, and an outdoor family park.
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