Jeju Dream Tower casino resort negotiating US$530.6M refinancing deal
Lotte Tour is in talks with several financial institutions to refinance a mortgage for Jeju Dream Tower casino resort.
South Korea.- Lotte Tour Development, the operator of the Jeju Dream Tower resort and foreigner-only casino on Jeju Island, has announced that it is in talks with major financial institutions to refinance a nearly KRW700bn (US$530.6m) mortgage. It hopes to conclude the refinancing exercise by late October.
The mortgage relates to construction costs for Jeju Dream Tower, which opened in December 2020 during the Covid-19 pandemic. Baker Tilly Woori, the auditor of Lotte Tour, noted in the group’s report for the financial year ending December 31 that “uncertainty exists in corporate viability” due to liabilities exceeding assets by KRW966.2bn.
According to the auditor, the warning was triggered by an overlap between the maturity date relating to the mortgage loan and the ‘put’ option for investors. The option, active from September 20, 2021, to September 20, 2025, gives them the right to sell their investment in foreign convertible bonds.
In March, the company reported net casino sales of almost KRW43.68bn (US$33.4m) for the full-year 2022. The casino segment generated an operating loss of KRW16.45bn, which widened from KRW10.24bn in the previous year.
