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Mohegan exec dismisses INSPIRE’s default trouble, talks with lender underway
Mohegan INSPIRE, South Korea’s newest integrated resort, maintains sufficient operational funds despite facing financial challenges, according to Chief Operating Officer and Chief Financial Officer Ari Glazer.
“Nothing has changed … in terms of where INSPIRE is financially and the need for liquidity,” CFO Ari Glazer explained to attendees on Friday ‘s call.
Speaking at Mohegan’s fourth-quarter 2024 earnings call, Glazer assured that the property’s liquidity and operational status remain stable, as multiple proposals to revise financial agreements have been proposed. He emphasised that nothing has changed for INSPIRE’s financial position and liquidity needs.
The resort’s financial position has come under scrutiny following Mohegan’s default on its US$275 million Korea Term Loan for the US$1.6 billion development. The company faces additional pressure to refinance a US$704 million Korea Credit Facility due November 2025 to meet future debt obligations.
Negotiations with lenders futile
Ongoing negotiations with HoldCo lenders have proved unsuccessful due to unacceptable conditions, though the company continues to seek a viable solution. Glazer stressed that any covenant amendment failures would not affect Mohegan’s debt agreements across its US or Canadian subsidiaries.
The property requires no additional financial support from the broader Mohegan group during its growth phase.
Despite these challenges, Mohegan reports encouraging operational metrics through the December 2024 quarter – the first quarter of the company’s 2025 financial year.
The INSPIRE resort achieved net revenues of US$62.2 million in the September quarter, with casino visitation reaching new peaks of 30,729 in August and 32,043 in September. Hotel occupancy touched an impressive 89.7 percent in August, though it declined to 77.2 percent the following month.
COO Joe Hasson highlighted the property’s growing momentum during Friday’s earnings call, emphasising consistent improvements through the December quarter. While acknowledging positive trends in performance metrics, he noted that lower-than-expected table hold continues to present a significant challenge for the operation.
INSPIRE yet to reach profitability
Mohegan executives also elaborated on their future market strategy, explaining their broad approach to attracting visitors, given the casino’s foreigners-only status. The focus remains on introducing the resort to the wider region while developing strategies to enhance profitability within their current visitor volume.
Mohegan continues to focus on optimising its capital structure whilst expanding regional presence, aiming to position INSPIRE as South Korea’s leading international resort destination.
Despite generating US$163.3 million in revenue since opening, the resort has not yet reached profitability. The situation is further complicated by ongoing legal disputes with the primary contractor involved in the property’s development.
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