Entertainment <\/p>\n
Creditors who helped finance Mohegan Gaming & Entertainment’s (MGE) South Korea resort have demanded immediate repayment of the loans, or see the company forfeit its stake in Mohegan Inspire. <\/strong><\/p>\n MGE chief financial officer Ari Glazer shared the development Thursday (13 February), during a fourth-quarter earnings call.<\/a><\/p>\n \u201cJust a few hours ago, we received notice from the agent for the lenders to MGE Korea Limited, the parent company of Inspire, that they have accelerated the debt,\u201d Glazer said.<\/p>\n Invoking the acceleration clause could allow principal lender Bain Capital to \u201ctake certain remedies, including appropriation of the shares of MGE Korea Limited,\u201d Glazer continued. \u201cWe\u2019re evaluating the propriety of these actions and considering the appropriate responses.\u201d<\/p>\n The $1.7 billion (\u00a31.3 billion\/\u20ac1.6 billion) integrated resort opened in Incheon, South Korea last March. Early excitement about the IR, hailed as the \u201cthe Las Vegas of Korea,\u201d spurred the Connecticut-based tribal operator to a record-breaking second quarter.<\/a> In Q2 2024, companywide net revenue reached $504 million, up 21.4% over 2023.<\/p>\n MGE President and CEO Ray Pineault\u00a0attributed the results to \u201cprofitable growth in digital, the ramp-up at Inspire\u2026 (and) the resilience of our flagship, Mohegan Sun.\u201d He called them \u201cimportant drivers for our growth in the present and future.\u201d<\/p>\n At the time, CBRE analysts said the Incheon resort could achieve positive cash flow by early 2027.<\/p>\n But that momentum slowed. By the end of the 2024 fiscal year<\/a>, EBITDA of $349.0 million had dropped almost $51 million, in part due to opening costs at Inspire, as well as low table hold at the IR\u2019s foreigners-only casino. Now lenders are calling in their markers.<\/p>\n Last month, MGE said it offered \u201cno assurance\u201d that it could successfully refinance $275 million in Bain-backed loans and other obligations. That could trigger defaults that compromise MGE as a \u201cgoing concern.\u201d <\/p>\n In yesterday\u2019s earnings report, MGE again acknowledged its looming debt maturities and potential financial covenant violation. \u201cTaken together,\u201d the report stated, they \u201cpresent significant risks to investors.\u201d<\/p>\n However, Glazer added, the South Korean debt crisis \u201cdoes not result in a cross-default to any other Mohegan debt.<\/p>\n \u201cNevertheless, while we do not expect any material impact on our operations at any of our North American properties in the first quarter, we do need to evaluate the impact of these events on our overall financial reporting,\u201d he said. \u201cWe will provide subsequent disclosure in due course.\u201d<\/p>\n MGE reported a $216.7 million increase in net revenue over fiscal 2023. Glazer attributed the boost to \u201ccontinued growth in Mohegan Digital, and strong non-gaming revenues at our other resorts.\u201d<\/p>\nEarly momentum slowed<\/h2>\n
Glazer: Little impact outside South Korea<\/h2>\n
MGE still Inspired<\/h2>\n