In a filing with the Hong Kong stock Exchange this week Lippo Worldwide Investments stated that it was in negotiations with Caesars Entertainment over a possible sale of its stake in their planned $739 million integrated resort and casino slated for Incheon, South Korea. The project was approved by the South Korean government a year ago.

Lippo stated in a January filing that they were not certain they would proceed with the project having failed to resolve issues with Caesars Korea Holding by the end of 2015. The consortium had planned to pay about $96 million for land in the special economic zone near Seoul’s international airport. The project is planned to have over a million and a half square feet (150,000 sqm) of floor space. Total investment for the project was projected to be around $2 billion.

Lippo indicated they may participate at some level in the development but have no interest in any gaming aspect. The filing stated, “In light of the current outlook for the gaming industry in North Asia and the volatility of the global economy, the group is in discussions with Caesars for some alternatives which may include the possibility for a third party investor to acquire the group’s interest in the project. The company has no interest in participating in any gaming aspect of the project in any event.”

However, the uncertainty may not revolve around the global economy or gaming industry but with Caesars troubles at home. Its operating unit filed for bankruptcy protection to shed some $10 billion of its $18 billion debt after being saddled with the mud of an ill-timed leveraged buy out. Although the parent company has not filed for bankruptcy, the possibility that the operating unit’s junior creditors could prevail in suits against them may create enough uncertainty to make a continued partnership indefensible.

In other developments in the region, last month U.S. casino operator Mohegan Sun’s partnership with KCC Corp received a license from the government to operate their Inspire Integrated Resort on nearby Yeongjong Island. That project is expected to break ground next year and could be open as soon as the first part of 2020 with a 215,278 square foot casino at a cost of $1.21 billion, and as much as $5 billion upon completion of the entire integrated resort complex.

Paradise Company, a current South Korean casino operator is also building an integrated resort at the other end of the airport in conjunction with Japanese gaming machine maker Sega Sammy. The first phase of Paradise Sega Sammy could open as early as the latter part of 2017.

Although a license hasn’t been granted for a fourth casino, an affiliate of  Incheon Jewellery Group of Hong Kong – Chow Tai Fook Enterprises Ltd, has expressed interest in committing $2.6 billion to build a casino resort in the Incheon Free Economic Zone. Those plans may have come off the table however with the company involved in partnerships for the $4 billion Nam Hoi An Resort in Vietnam and their 25% share in the $3 billion Star Brisbane.

In January, 2015 Bloomberry Resorts Corp (Solaire) made tangible movements into the area when they purchased 30 acres on Muui Island.

Changwon City’s Ungdong Entertainment Complex was to see a Twentieth Century Fox theme park, including a casino open this year, but unconfirmed reports indicate that the project has been canceled over issues with the real estate.

 

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