Key points:
- Bain Capital will have operational control over the Inspire Entertainment Resort in Korea
- This comes after the debt against Mohegan was accelerated
- Bain emphasises that this will have no effect on the day-to-day operations for customers
Bain Capital, a global investment firm, has taken over operational control of the Inspire Entertainment Resort in Incheon, Korea, as it exercises its rights to take control of MGE Korea Limited, the resort's parent company.
Previously known as Mohegan Inspire Entertainment Resort, the property was soft-launched on 30 November 2023 before the grand opening ceremony on 5 March 2024.
However, Mohegan has been struggling with debts accrued from opening the resort for some time.
A spokesperson for Bain said: “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.”
As part of Bain’s statement, the investment company assured that “this transition will have 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.”
A spokesperson for Inspire Entertainment Resort said: "Bain Capital has been a trusted partner and investor since the early development stages of the Inspire project, maintaining a strong and collaborative relationship with us. We believe that this transition will further solidify our partnership and accelerate Inspire’s sustainable growth."
On 14 February, Mohegan explained in its Q1 results report that: “Mohegan Inspire will need to refinance this facility and we expect that without such refinancing it is probable that Mohegan Inspire will not have sufficient liquidity to meet its debt obligations under this facility when they come due.
“In addition, if Mohegan Inspire is unable to meets its obligations under this facility, the Company’s parent entity is subject to a credit enhancement support agreement pursuant to which we could be required to provide up to $100m of principal, interest, and other sums due under the Korea Credit Facility.
“We have determined that we will not have sufficient liquidity to meet such an obligation if it were to arise.”
Good to know: In Mohegan's Q1 results, the operator reported a 71.2% increase in international resort revenue, jumping from $79.3m to $135.7m while adjusted EBITDA grew by 168.9% – although it is worth considering that its net loss also grew 3% to -$33.9m
Hours after the Q1 report was published, Bain Capital announced that it would accelerate the debt, seemingly to the surprise of Ari Glazer, Mohegan’s CFO.
During the company’s earnings call, Glazer 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 Ltd.
“We are evaluating the propriety of these actions and considering the appropriate responses.”
At the start of the year, Mohegan announced that 2024 saw its highest-ever annual revenue, with the FY24 report showing that revenue increased by 13% up to $1.9bn.
