Bain Capital Considers Selling the Mohegan INSPIRE Resort

Bain Capital, the private equity entity that took control of Mohegan’s new resort in South Korea, is reportedly looking to sell the property. Mohegan, however, believes that a sale would not be in the property and its customers’ best interest.

Bain Capital Puts Mohegan INSPIRE Up for Sale

Bain Capital, which wrested control of Mohegan’s INSPIRE integrated resort in South Korea, has now put the property up for sale, according to a report by The Korea Times. Speaking to the news outlet, Bain acknowledged that it has initiated an open market bidding process, despite Mohegan’s concerns.

Earlier this year, Mohegan defaulted on a $275 million loan, despite the initially promising revenues of its INSPIRE resort. As the principal lender of Mohegan Gaming & Entertainment Korea, Bain Capital swooped in to grab a controlling stake in the Korean division, thus securing control of the integrated resort.

Situated on Yeongjong Island, Mohegan’s project represented the tribal company’s ambitions to become a global operator. INSPIRE furthermore hosts the largest and fully licensed foreigner-only casino in South Korea.

While Mohegan tried to negotiate with Bain, the two companies have so far failed to reach a mutually agreeable deal. According to Mohegan, Bain rejected proposals to change the deal and had instead proposed an arrangement under which it would have received large payments ahead of other INSPIRE lenders.

Bain Seeks to Finalize Its Ownership But Would Still Consider Bids

Mohegan officials told The Korea Times that they do not believe that a change of control at this time would be in the best interest of INSPIRE, its staff, customers, other lenders and investors.

In the meantime, Bain also spoke to the newspaper and acknowledged that it had initiated the sale process. Bain, however, clarified that the sale was mostly seeking to finalize its legal ownership of INSPIRE, allowing it to complete the asset transfer process and establish the property’s fair market value.

Bain continued that it would nevertheless “seriously consider” any offer for the resort and vowed to maintain transparency and legal clarity throughout the process. The equity firm concluded that it is open to offers.

However, if Bain does end up selling the resort, its casino license could be voided, unless certain approvals are secured. If a third party acquires the resort, the Ministry of Culture, Sports and Tourism would need to approve the resort’s new CEO. However, the ministry has so far declined to comment, preferring to first see how the situation unfolds.

In any case, INSPIRE would still be required to make certain contributions to the economy and the country’s cultural development. A ministry spokesperson said: “The license was granted to Inspire, so regardless of any changes in share ownership, Inspire is still obligated to meet certain conditions — such as making specific investments and constructing required facilities.”