Lippo Doubtful of Exiting Caesars Entertainment Venture By This Month
Hong Kong-listed real estate developer Lippo Ltd has confirmed that it is still in talks with American casino developer Caesars Entertainment Corp for the disposal of its stake in their proposed South Korean gaming joint venture.
In a filing made with the Hong Kong Stock exchange, the company stated that it is continuing discussions with Caesars but it doesn’t expect it to wrap up soon.
Lippo had joined hands in Dec 2014 with a subsidiary of Caesars, Caesars Korea Holding Co LLC, via Lippo Worldwide Investments Ltd, a unit of Lippo to enter into a conditional agreement to buy land for a casino development in the South Korean city of Incheon for an investment of US$ 95.9 million.
The deal also included OUE International Holdings Pte Ltd, which a wholly-owned subsidiary of Singaporean real estate company OUE Ltd. In August, Lippo had announced that it was in discussions with Caesars and an unnamed third party investor for the disposal of its stake and OUE’s stake in the JV. Construction for the project is yet to start according to market reports.
In a statement, Lippo said
Whilst it was anticipated the exit agreement would be entered into within November 2016, the exit negotiations are continuing, and their outcome is dependent upon a separate set of negotiations between Caesars Korea and the investor. Accordingly, it is unlikely that the exit agreement will be entered into this month.
Lippo had announced its withdrawal from the project in March and stated that despite the exit it might retain involvement in some parts of the development. OUE had described the project as a KRW855-billion (US$ 730-million) development having a casino floor area of over 150,000 square metres (1.61 million square feet) situated on a 4.3-hectare (10.6-acre) site.
The facility was to be operated by Caesars and the then-chairman of the company Gary Loveman had announced that the property would be opened in time for the 2018 Winter Olympics which is to be held at South Korea.
South Korea has in total 17 casinos with just one Kangwon Land catering to the local population. Three key casino projects have so far been announced for Incheon, with Caesars – Lippon being one of them. U.S based Mohegan Tribal Gaming Authority along with South Korean chemicals giant KCC Corp and Incheon International Airport Corp are opening the Inspire Integrated Resort.
The third casino resort is being developed by local casino operator Paradise Co Ltd and Japanese pachinko company Sega Sammy Holdings Inc who plan to open the Paradise City casino resort in April 2017.