Global private investment giant Bain Capital says it has assumed “operational control” of the INSPIRE Entertainment Resort from US tribal casino operator Mohegan.
Just days after Mohegan revealed that its principal lender had accelerated its actions against INSPIRE parent MFGE Korea Ltd following a recent event of default, Bain confirmed in a written response to IAG’s inquiries that it had “assumed operational control of the resort as the result of Bain Capital’s exercise of its rights to take control of MGE Korea Limited, the parent company of INSPIRE. As this strategic move reinforces Bain Capital’s commitment to ensuring INSPIRE’s long-term success and competitiveness, INSPIRE will continuously accelerate its drive to solidify its position as one of Asia’s premier entertainment destinations.”
Bain Capital’s statement explained that there would be “no impact on INSPIRE’s employees, guests or day-to-day operations. INSPIRE’s existing management team and Bain Capital are working closely to ensure business continuity while implementing enhancements that will strengthen the resort’s market position.”
The company added, “As a long-term investor with a strong track record in Korea, Bain Capital will provide full support to enhance INSPIRE’s financial performance, elevate guest experience and drive sustained growth.”
It also quoted an INSPIRE Entertainment Resort representative as stating, “Bain Capital has been a trusted partner and investor since the early development stages of the INSPIRE project, maintaining a strong and collaborative relationship with us. We believe that this transition will further solidify our partnership and accelerate INSPIRE’s sustainable growth.
“With Bain Capital’s deep industry expertise, extensive experience, and strong teamwork with our management, we are confident that this move will enhance operational stability and drive long-term growth.”
The dramatic turn of events comes after Mohegan COO Ari Glazer revealed during the company’s 4Q24 earnings call on Friday that Bain Capital had opted to take action following a breakdown in negotiations.
“Following the earnings release this morning and just a few hours ago, we received notice from the agent for the lenders to MFGE Korea Ltd, the parent company of INSPIRE, that they have accelerated the HoldCo debt,” Glazer said during the earnings call,
“Further, the agent and Bain Capital, the principal lender, have purported to take certain remedies including appropriation of the shares of MGE Korea Ltd.
“We are evaluating the propriety of these actions and considering the appropriate responses.”
Mohegan had previously revealed it was in default under the terms of a US$275 million “Korea Term Loan” for the US$1.6 billion Korean IR but said at the time it was in discussions with lenders and was confident of a solution given its sufficient cash and liquidity position.
Mohegan also confirmed the default was a debt covenant violation related to provisions contained within loan documents requiring INSPIRE to achieve agreed financial targets, and was not related to a missed payment, principal or interest.
Nevertheless, Glazer stated in January that the company had made multiple proposals to its lenders around amendments that would give it more time to achieve financial targets – none of which had been accepted at that time. Time now appears to have run out.
INSPIRE Entertainment Resort, previously known as Mohegan INSPIRE, held a soft opening of its non-gaming operations in November 2023 and launched its foreigner-only casino a year ago in February 2024. While slow to ramp, the property has shown steady month-to-month improvement including an all-time high in mass and premium mass table drop in December.
Net revenues at Mohegan INSPIRE in the December quarter reached US$63.5 million, up 2.1% on the September quarter, while an Adjusted EBITDA loss of US$4.2 million was narrowed from US$6.9 million in the September quarter.
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