Following Mohegan’s report earlier this month that it was working to introduce non-gaming entertainment at the Inspire resort in South Korea by the end of this year and a casino in early 2024, Mohegan Gaming and Entertainment, the US tribal gaming company operated by the Mohegan Tribe, announced today that it has promised to add up to KRW185 billion, which is approximately 142 million US dollars, in extra cash to secure the completion of the Korean Integrated resort project Inspire.
This amount can be divided into installments or invested all at once prior to September 30, 2023 and the money will be delivered to Mohegan’s South Korean subsidiary, Inspire Integrated Resorts Co., Ltd.
Reason for additional funding:
After securing approximately $1.55 billion in total financing to enable it to complete the first phase of its upcoming Inspire Entertainment Resort property, an Equity Commitment Letter was signed on February 16 confirming the company’s intention to secure extra funding for its unfinished resort project.
With the project currently at 43% in terms of construction, one of the main reasons for the additional investments is that, while ahead of schedule, more money is needed to complete it.
In this regard, company officials said: “The additional funding provides for certain non-dilutive equity capital contributions to Inspire as needed to complete the project in an amount up to KRW155 billion (US$119 million).”
However, that’s not all; as the company will also invest up to KRW30 billion, which is approximately 23 million US dollars, more to cover expansion and pre-opening costs in the event that these costs surpass budgeted amounts and available contingency funds.
The company’s moneylenders can make extra contributions if necessary, because they have become third-party express beneficiaries of the Equity Commitment Letter.
Also concurrently, Mohegan signed a Waiver and Consent Letter with those same moneylenders that requires the moneylenders to agree to certain amendments to the expansion plan for Inspire Korea, involving alterations to the fixed-price construction agreement to cover increased project scope and increased inflation costs.
In terms of investment, Mohegan signed an agreement in early January with Hanwha Hotel group, which contacted the company because of its desire to operate three 5-star hotel towers at the future resort.
The company agreed to do so in exchange for an extra $80 million “subordinate investment.”
Layout of the upcoming Mohegan Inspire:
The new resort will consist of three hotel towers, an arena, a foreigner-only casino, restaurants, retail, convention and entertainment facilities, a year-round water dome experience and an outdoor family park.
When it officially opens, it will become the second integrated resort in Incheon just after Paradise City, which is a joint development brought to life by a partnership between Korea’s Paradise Co and Sega Sammy Holdings, a Japanese international entertainment company.