Bain Capital Takes Control of Mohegan INSPIRE as MGE Defaults on Debt

All seemed to be going well for the Mohegan INSPIRE Entertainment Resort in South Korea. Unfortunately for the ambitious tribal operator, financial hurdles led to private equity firm Bain Capital securing a controlling stake in Mohegan’s Korea-facing division, MGE Korea.

In the aftermath of the takeover, Mohegan vowed to continue to negotiate an outcome that would be favorable to its investors.

Bain Accelerated the MGE Korea Mezzanine Loan

MGE reportedly defaulted on around $275 million in loans, despite the promising financials of its INSPIRE resort. Strategically situated on Yeongjong Island, this daring project represented Mohegan’s ambitions to grow on an international scale.

Mohegan INSPIRE opened its doors in January 2024 and launched casino gaming shortly after. As the largest integrated resort in South Korea, the property sought to capitalize on the demand for casino entertainment amid the rapid growth of Asian gaming.

Reports, however, claimed that MGE Korea failed to repay the loans it had borrowed in 2021. The loans were reportedly taken from various sources and helped Mohegan with its $1.6 billion project. Bain Capital was MGE Korea’s principal lender.

As MGE Korea defaulted on its loans, Bain Capital acquired a controlling stake in the Korean arm. The private equity firm confirmed that on Monday but refused to disclose further details about this move.

Mohegan Officials Confirmed the Takeover

Mohegan officials also commented on the matter, confirming Bain’s takeover of MGE Korea. The company elaborated that it had tried to prevent this scenario by negotiating amendments to its loan agreements. Unfortunately for Mohegan, Bain Capital rejected the proposals.

We made several good faith proposals for amending the financial covenants that are consistent with market precedents. However, Bain Capital has dismissed those proposals and provided counterproposals that would result in Bain Capital receiving large payments ahead of other Inspire lenders.

Mohegan statement

Mohegan: The Takeover Will Not Immediately Affect the Resort But Is Not in Its Best Interest

Mohegan emphasized that it will continue to negotiate favorable terms with Bain in an attempt to ensure benefits for all its stakeholders. Resort officials, on the other hand, promised that the takeover would affect neither Mohegan INSPIRE’s operations nor its workers.

In the meantime, Mohegan’s financial position suggests that it would need refinancing to pay its debts. The company’s chief financial officer, Ari Glazer, said that the acceleration of the debt by Bain Capital was unexpected and came mere hours after the company’s recent financial report.

Mohegan further said that it does not believe that the change of control pursued by Bain is “in the best interests of the property, its team members and customers, other lenders and various key stakeholders.”