The funding consists of $575m in equity, comprising MGE’s $300m investment and $275m raised through private global equity firms Bain Capital and MBK Partners.
A project finance loan of $890m has also been raised through a bank consortium of KB Securities, NH Investment & Securities and Hana Financial Investment. In addition, general contractor for the project Hanwha Engineering & Construction Corp provided a subordinated investment of $85.5m.
“We have a proven track record in developing and operating leading integrated entertainment resorts in North America with our successes in Connecticut, Las Vegas and Niagara Falls, and we look forward to taking this success abroad as the first American Integrated Resort (IR) launched in Korea,” said James Gessner Jr, chairman of the Mohegan Tribe and MGE Management Board.
The funding will be used to develop phase one of the resort, which will include three five-star hotels, a 15,000 seat performance facility and the biggest convention centre in Seoul’s metropolitan area. The resort is expected to open in 2023.
It is hoped that the resort will reignite the tourism industry in South Korea following the effects of the novel coronavirus (Covid-19) pandemic.
“We anticipate a significant rebound in the tourism and leisure industry following the pandemic, and we look forward to contributing to the Korean economy while at the same time opening and operating a successful, state-of-the-art resort,” said Bobby Soper, international president for MGE.
“I’m thrilled to see our international vision for IR development reach this important milestone.”
Mohegan’s progress in Korea follows its consortium pulling out of the race to build and operate an integrated resort in Japan earlier this year. The tribal operator was part of the Oshidori consortium, which withdrew from the competition to build a property in Nagasaki in August, saying the project was no longer viable.
It also sold its stake in business selected to build an integrated resort in Greece in October, to joint venture partner and local construction giant GEK Terna.