Real estate developer Lippo Ltd. said in a filing to the Hong Kong Stock Exchange that it is considering the possibility to sell its interest in its joint project with US-based gambling operator Caesars Entertainment Corp. for the establishment of a casino complex in Incheon, South Korea.
In 2014, the two partners reached a conditional deal with vendor MIDAN City Development Co. Ltd. for the acquisition of land plot where the potential casino would be located. Lippo revealed in its filing that they did not manage to turn the deal unconditional before the December 31 deadline. The deal has not been terminated yet by any of the involved parties.
Lippo pointed to several reasons for its decision to back off from the project. In the first place, it said that the proposed casino resort may not get a final license at all. In addition, the company noted that the current outlook for the North Asian gambling industry and the overall “volatility of the global economy” were also among the key factors that made it enter into discussions with Caesars for the potential inclusion of a third-party investor that would purchase Lippo’s interest in the expensive project.
The real estate developer pointed out that it no longer has interest in taking part in the operation of the gambling venue. It seems, however, that the company is still considering the possibility to participate in development works related to the land plot, provided that the terms of the land deal eventually get settled.
In March 2014, the LOCZ Korea Corp. consortium was given the necessary approval from South Korea’s Ministry of Culture, Sports, and Tourism to design, develop, build, and operate an integrated casino resort in Incheon. The said consortium is comprised of Lippo Worldwide, a wholly owned Lippo subsidiary, OUE International, and Caesars Korea, subsidiary of Caesars Entertainment.
The companies have previously said that they plan to invest the amount of KRW743.7 billion in Phase One of the project, which is expected to be completed in 2018. The consortium is bound to spend a total of KRW2.3 trillion for the whole complex, which will feature a foreigner-only casino, residential buildings, a shopping mall, and a number of entertainment, food and beverage, and other exciting options.
