Lippo to abandon casino project in South Korea
The Indonesian developer wants its partner, Caesars Entertainment Corp to sell its stake in the project.
South Korea.- Lippo Ltd decided to hand over its stake at the joint venture with Caesars Entertainment Corp called LOCZ Korea. The decision was made due to the decline experienced by the gaming industry in Asia.
LOCZ Korea became the first foreign operator awarded with a casino license from the South Korea government in 2014. The 60-40 venture by Lippo and Caesars had planned to invest 2.3 trillion won (US$2 billion) to build a casino resort in Yeongjong Island, west of Seoul, by 2022. Even though Lippo decided to hand over its stake, the company still wants a participation in certain developments related to the project depending on the conditions agreed upon by the two parties.
“In light of the current outlook for the gaming industry in North Asia and the volatility of the global economy, the group is in discussions with Caesars for some alternatives which may include the possibility for a third party investor to acquire the group’s interest in the project,” said Lippo in a filing to the Hong Kong Stock Exchange. “However, it is to be noted the company has no interest in participating in any gaming aspect of the project in any event.”
In January 2015, Caesars Entertainment Operating Company and several U.S. subsidiaries lodged bankruptcy filing in a Chicago court, but in spite of concerns over the feasibility of the project, the Seoul government expressed it will approve the license if a qualified investor shows up. “Talks are currently underway with LOCZ to figure out the direction of the resort project. If Caesars finds an alternative investor, we will review the qualification and decide whether to approve the casino license,” said one of the officials from the Ministry of Culture, Sports and Tourism.
