Mohegan and Hanwha propose a funding deal for Inspire Entertainment Resort

The second tranche of US$40m must be funded on or before March 30, 2023.
The second tranche of US$40m must be funded on or before March 30, 2023.

Mohegan reaches an agreement with Hanwha for a US$80m investment in the Inspire project. 

South Korea.- Mohegan Tribal Gaming Authority announced details of a funding agreement with Hanwha Corp, one of South Korea’s largest conglomerates, regarding Inspire Entertainment Resort, an under-construction foreigner-only casino plus leisure complex at Incheon.

The South Korean group will make a “subordinated investment” amounting to approximately US$80m, in the form of issuance of non-registered, non-guaranteed junior convertible bonds.

The financing relates to the group’s under-construction Inspired integrated resort in Incheon is split into two tranches of approximately US$40m, the first of which was to be funded on December 30th, 2022. The second tranche of US$40m must be funded on or before March 30, 2023, according to a Mohegan filing.

The convertible bonds bear interest at a fixed rate of 5.5 per cent per year, maturing on December 30 of 2023, interest is payable every three months, with the first payment three months after the funding of each respective tranche. 

At maturity, Mohegan’s subsidiary Inspire Integrated Resort Co is required to pay a redemption amount equal to a yield-to-maturity rate of 10 per cent per year, compounding annually.

After 36 months, Inspire may pay up to 70 per cent to redeem the bonds, whereas after 60 months Hanwha can convert the bonds into common shares of Inspire, not to exceed 5 per cent of the total number of outstanding shares of inspire, at a price equal to KRW99,960 per share.

Hanwha Hotels & Resorts Co Ltd, a subsidiary of Hanwha, has agreed to manage non-gaming offerings at the property, including hotel operations. Mohegan announced in late 2019 the appointment of Hanwha Corp as the main contractor for Inspire Entertainment Resort.

Mohegan Inspire will build the largest resort in Northeast Asia in the IBC-III area of Incheon International Airport in Yeongjong-do through a total of 4 phases of business expansion by 2046. The 1st stage resort facility is currently under development, which will feature 3 five-star hotels (approximately 1,200 rooms), an arena with 15,000 seats (multipurpose performance hall), an indoor water park, convention facilities, a foreigner-only casino, a digital street, and an outdoor family park.

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