Mohegan Gaming reportedly losing ‘operational control’ of Mohegan Inspire in South Korea
A number of news outlets have reported that private equity firm Bain Capital has taken ‘operational control’ of Mohegan Inspire, the largest integrated resort in South Korea.
It follows reports of a missed loan repayment of $275m by MGE Korea, the South Korean subsidiary of the US-based Mohegan Gaming & Entertainment (MGE), which had owned 100 per cent of the resort on the island in Incheon. The resort’s official name has reportedly been changed from Mohegan Inspire Entertainment Resort to Inspire Entertainment Resort.
A Mohegan official was quoted as saying: “Although the management rights have been transferred to Bain Capital, there will be no immediate changes in the executive team.”
In a further statement Mohegan said: “While Mohegan did not satisfy certain financial covenant tests, we have not missed a payment of principal or interest. Specifically, the loan held by Bain Capital does not mature until May 2027, with no principal payments due before the maturity date.
“We made several good faith proposals for amending the financial covenants that are consistent with market precedents. However, Bain Capital has dismissed those proposals and provided counterproposals that would result in Bain Capital receiving large payments ahead of other INSPIRE lenders.”
“Since developing and launching INSPIRE, we have applied our extensive operational experience in the gaming industry, including providing INSPIRE with essential services in the areas of compliance, finance, technology, human resources and marketing,” it added. “We were committed to the long-term success of INSPIRE and to the continued expansion of the Incheon site.
“We have been and will continue to attempt to negotiate in good faith with Bain Capital to find a mutually agreeable solution that allows us to be continuing partners with the people of Korea and our various stakeholders. We do not believe the change-of-control pursued by Bain Capital is in the best interests of the property, its team members and customers, other lenders and various key stakeholders. Mohegan believes we put the essential components in place for long-term success and the property needs more time to achieve its full potential.”
Mohegan COO Ari Glazer spoke about the action being taken by Bain during the company’s 4Q24 earnings call.
He said: “Following the earnings release this morning and just a few hours ago, we received notice from the agent for the lenders to MFGE Korea Ltd, the parent company of INSPIRE, that they have accelerated the HoldCo debt. Further, the agent and Bain Capital, the principal lender, have purported to take certain remedies including appropriation of the shares of MGE Korea. We are evaluating the propriety of these actions and considering the appropriate responses.”
Revenues in its last quarter were up 2.1 per cent to US$63.5m, with EBITDA loss narrowing to US$4.2m from US$6.9m the previous quarter.
In a statement published by Inside Asian Gaming, Bain stated: “Bain Capital has assumed operational control of the resort as the result of Bain Capital’s exercise of its rights to take control of MGE Korea Limited, the parent company of INSPIRE. As this strategic move reinforces Bain Capital’s commitment to ensuring INSPIRE’s long-term success and competitiveness, INSPIRE will continuously accelerate its drive to solidify its position as one of Asia’s premier entertainment destinations.”
“There will be no impact on INSPIRE’s employees, guests or day-to-day operations. INSPIRE’s existing management team and Bain Capital are working closely to ensure business continuity while implementing enhancements that will strengthen the resort’s market position.”
“As a long-term investor with a strong track record in Korea, Bain Capital will provide full support to enhance INSPIRE’s financial performance, elevate guest experience and drive sustained growth.”
“With Bain Capital’s deep industry expertise, extensive experience, and strong teamwork with our management, we are confident that this move will enhance operational stability and drive long-term growth.”
