Monday, March 21, 2016—In a filing with the Hong Kong Stock Exchange, Lippo Group stated two partners in the joint venture with LOCZ Korea Corp did not make the land acquisition deal. It was supposed to be completed on December 31, 2015. Lippo already warned that the LOCZ Korea project may not proceed due to the inability to get land. The land is 89,000 square meters and owned by Midan City Development Co.
Lippo emphasized the deal was not officially ended; however, there are hurdles that need to be tackled. Lippo also stated the deal was started before China’s change to stop high-rolling gamblers in South Korea’s casinos. Lippo is looking to pull out of the deal, at least as it pertains to the gambling part of the project. The company stated they would be interested in the projects non-gaming development. This is assuming the land deal will be completed to the satisfaction of all parties.
Lippo is still in negotiations with Caesars, with regards to the LOCZ venture. There are issues that may be causing Lippo to be more cautious. Caesars is losing financially due changes in the gambling industry. Bankruptcy filing protection was filed for in January 2015. There was also a news release this week stating that Caesars parent company is expected to make certain payments, which were already promised to certain creditors.
The LOCZ partners are supposed to spend $2 billion for the Incheon Resort and Casino. Lippo is not certain the monetary investment provided by Caesars will be any good. It is one of the main concerns Lippo has with proceeding in the deal. If Lippo does back out, it could be the end of the entire project if Caesars is suffering as badly, financially, as it seems.