- Bain Capital took control of South Korea’s Inspire casino resort in February 2025 after Mohegan defaulted on growth covenants on a $275m loan despite making scheduled payments.
- FY2025 revenue rose about 90% to KRW 415.9bn and EBITDA turned positive, but the resort still posted a KRW 154.8bn net loss amid heavy interest costs.
- Mohegan put in over $300m of equity, booked a $77.6m gain on deconsolidation, and still faces roughly $100–137m of contingent liabilities tied to guarantees.
- Bain refinanced the project in December 2025 with secured debt at rates up to ~11.25% and is weighing a sale while negotiating possible Mohegan re-entry amid ownership and licensing uncertainty.
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The case of Inspire illustrates the convergence of ambitious international expansion, covenant-based financing risks, and the complexities of operating in regulated foreign gaming markets. Bain’s takeover signals the consequences when growth doesn’t meet projections—covariate triggers rather than defaulted payments can still lead to operational control if lenders are structured appropriately.
Operationally, Inspire is now demonstrating clear forward momentum: fiscal 2025 saw pronounced scalability in casino revenues (up ~147%), recovery in non-gaming divisions, an EBITDA turn positive for the first time, and over 8.8 million cumulative visitors since opening late 2023. Nonetheless, its profitability remains fragile, with substantial net losses, high interest cost burden, and ongoing exposure for Mohegan despite loss of control.
Financing and control dynamics are central. Bain’s December 2025 refinancing replaced earlier project finance with secured debt at steep rates (~11.25%), reflecting risk perceptions and squeezing margins. Mohegan has exited operational control and is working to limit its exposure—exiting guarantees, credit enhancements, and other obligations, but some contingent liabilities remain.
Strategically, Bain may aim to polish operations and boost value before an eventual exit, perhaps via sale, given its signals of “if a willing buyer emerges”. Meanwhile, Mohegan’s international aspirations are called into question, especially given its lack of Asia-market experience, foreigner-only casino constraints, and unexpected tourism or regulatory setbacks.
Open questions include how permanently foreigner-only status limits scaling, whether Mohegan can negotiate terms to re-enter beneficially, how sensitive financial performance is to external political/tourism disruptions, and whether ownership/licensing legal ambiguities can be resolved favorably for both parties.
Supporting Notes
- Mohegan invested more than US$300 million in equity before losing operational control; Bain had provided US$275 million in financing and called the loan early (Feb 2025). [Primary FT article]
- Revenues for Inspire were KRW 415.9 billion (~US$285 million) in FY25 (ended Sept 30, 2025), up ~90% YoY; net loss narrowed to KRW 154.8 billion (~US$106 million), with EBITDA turning positive (KRW 16.9 billion, ~US$11.6 million).
- Casino operations led growth: gaming revenue up ~147% to KRW 267.2 billion (~US$183 million); hotel, F&B, entertainment also contributed. Visitor count since opening surpassed 8.8 million as of Sept 2025.
- Bain’s refinancing in December 2025 converted earlier project loans into secured debt; interest rates reportedly up to ~11.25% per annum; interest cost last fiscal year ~KRW 120 billion (~US$82 million).
- Mohegan recognized a gain of US$77.6 million after deconsolidation but still faces estimated liabilities of ~US$100-137 million in guarantees and exposure linked to INSPIRE, under credit enhancement and other financial commitments.
- Management changes under Bain: new COO Wade Howk emphasized growing non-gaming, marketing hires experienced in Asia; CEO Gyubum Ko installed with strong local market background though not in gaming; other executives recruited from non-gaming backgrounds.
- Challenges in performance: early under-performance attributed to missed visitation targets, high win-rate customers, low repeat visitation, transport access issues, and decline in foreign tourism following political incidents. [Primary]