The Mohegan Tribal Gaming Authority stated that although it currently does not have ownership of the Mohegan INSPIRE Entertainment Resort in South Korea, there are certain ‘contingent exposures’ that will persist until refinancing milestones, management transitions, and other obligations are fully resolved.
Bain Capital, an American private investment firm based in Boston, exercised its acquisition rights for INSPIRE’s parent firm MGE Korea Limited in February.
In its recent third-quarter financial report, Mohegan said lenders led by Bain Capital seized control of its former South Korean resort vehicle on February 13th, triggering the deconsolidation of the business and a shift to discontinued operations across prior periods.
The move generated a $77.6 million gain on disposal and recognition of $137. million in estimated guarantee liabilities tied to the project. The company no longer holds equity in INSPIRE or its parent entities and will not benefit from the resort’s performance.
The seizure followed acceleration of a $275 million mezzanine term loan to MGE Korea Limited arranged in 2021.
Despite the exit, Mohegan outlined several continuing links and contingent obligations, noting discussions with Bain Capital are ongoing to fully transition duties under the 2021 management agreement, and certain Mohegan subsidiaries may still provide services to INSPIRE until the handover is complete.
Under a Credit Enhancement Support Agreement, Mohegan agreed to provide up to $100 million of support for INSPIRE’s Korea Senior Credit Facility, which matures on November 29th, 2025 and will need amendment, extension, or refinancing if INSPIRE lacks liquidity to repay. The company says it cannot facilitate that process post-transition.
A separate backstop arrangement requires Mohegan to reimburse Hanwha beyond KRW3.75 billion ($2.7 million) per quarter for interest on a KRW291 billion ($210 million) facility at a fixed 7 percent.
The potential exposure is roughly KRW4 billion ($3 million) through maturity, and Mohegan must maintain a KRW5.65 billion ($4 million) letter of credit with Hanwha.
Mohegan has also provided an indemnity to mezzanine lenders for customary “bad boy” acts, though no claims have been asserted.
It committed up to KRW50 billion ($36.9 million) in additional equity if needed to maintain minimum cash, and maintains a KRW24 billion ($17.3 million) standby letter of credit to the Incheon International Airport Corp.
The company said the required base plan was filed in February 2025 and does not contemplate additional cash funding, adding that it believes INSPIRE is in compliance.
In addition, a 2023 letter agreement committed up to KRW30 billion ($22.2 million) of additional equity for certain pre-opening and construction costs. As of the transition, Mohegan said dedicated funds covered such costs, while disputes over contractor claims remained contested by INSPIRE prior to February 13th.
