The company that runs South Korea’s Mohegan Inspire Entertainment Resort, Mohegan Gaming & Entertainment, is dealing from serious financial difficulties and legal issues. Critical issues, such as debt obligations and contractor litigation, are revealed in the company’s most recent fiscal report for the year ending September 30, 2024.
Its long-term sustainability was called into question when the company reported a “anticipated default” on its $441.8 million Korea Term Loan. A $704 million Korea Credit Facility that matures in November 2025 also needs to be refinanced by Mohegan. Lenders could seize important assets, such as shares in the Inspire property, if secured exemptions for unfulfilled financial covenants under the Korea Term Loan are not obtained.
Mohegan has stated its intentions to refinance and secure additional liquidity, but these efforts depend heavily on market conditions. The company admitted, “Management plans to refinance… and seek additional sources of liquidity,” while noting that these strategies remain uncertain.
Litigation and Financial Performance
Mohegan is under additional strain as a result of a legal dispute with the company that built its resort in South Korea. Mohegan asserts offsets for delays and repairs, but the contractor requests payment for change order expenses. The business pointed out that it is too soon to forecast the outcome of the lawsuit or its financial impact.
Since opening its non-gaming services in November 2023 and its casino exclusively for foreigners in February 2024, the $1.6 billion Mohegan Inspire complex has not yet turned a profit. Despite earning $163.3 million in revenue for the fiscal year, the property reported a negative EBITDA of $49.5 million.
Mohegan’s financial difficulties are not limited to South Korea. The business has $3.14 billion in long-term debt, and if Korean loans are not paid off, there is a possibility of cross-defaults.
Despite these hurdles, Mohegan’s wider portfolio, including Mohegan Sun in Connecticut and properties in Canada, reported $1.9 billion in net revenue—a 13% year-over-year increase. However, adjusted EBITDA dropped to $349 million, reflecting industry-wide challenges.
As the integrated resort sector rebounds, competitors in Macau and Singapore benefit from stronger financial frameworks. Mohegan, however, faces significant uncertainty, with its annual report acknowledging ongoing concerns about its financial stability.
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