Imperial Pacific $100m in the hole for Saipan casino
Saipan casino operator Imperial Pacific International’s (IPI) massive debt to the Commonwealth of Northern Mariana Islands (CNMI) government will soon exceed US$100 million. For months, the company has been claiming that it would receive a significant capital injection from a South Korean investor to save its exclusive casino license.
Payday is yet to arrive for the company, and they seem to be getting further into debt. In a meeting late last week, the Commonwealth Casino Commission (CCC) took apart IPI’s unpaid loans. The commission revealed that in 2020 and 2021, the company neglected to pay for its license, regulatory fees, and royalties.
Mid-August is the due date of the $15.5 million annual license this year, and IPI will be expected to pay off several regulatory fees on October 1. With all these considered, in two months, the US-supported territory will be in an even tighter financial vase and owe around $103 million.
IPI’s inability to clear these debts was why the CCC previously called a hearing earlier this year to revoke the casino license the establishment is desperately hanging on to. The hearing was eventually put on hold, and the Saipan casino operator was given a temporary restraining order. The two parties are in settlement talks; however, recent news revealed that no agreement has been reached yet.
IH Group would take over operations
IPI previously announced that it was gearing up to receive $150 million from the IH Group, a South Korean Investor; however, the amount is yet to arrive. Besides owing regulatory fees and royalties, the company is also embroiled in several legal battles worth tens of millions of dollars. Due to this, if the casino operator is given the anticipated $150 million, almost all of it would be used to cancel the sizable debt.
After the transition, the South Korean group would handle operations of the gaming venue as well as the luxury villas of the Imperial Palace.
IH Group has also promised to carry on the building of the tower hotel after the payout. The construction was previously put on hold due to IPI’s financial and legal issues and the ongoing pandemic.
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Chairman Kyunam Kim toured the property previously and confirmed the news about the continued project. He said, “This project … will soon proceed smoothly and will contribute greatly to the economic recovery of the CNMI.”
The South Korean group would need the permission of the CCC to operate that casino.
Due to the vastness of IPI’s debt, when or if the company receives the entire agreed sum, almost all of it will be used to relieve its financial troubles, and nothing will remain to tender to the operational or construction expenses. To solve this, IH Group or another party would have to produce more funds to aid the building and put the company in more debt.
IH Group allegedly a scam
According to reports, the deal between IPI and IH Group involved the agreed funds exchanging hands in May. However, only a small part of the expected sum was issued. Instead of $150 million, IPI received only $245,000 from the IH Group. The company is allegedly getting more frustrated by how slowly the money is moving and told CCC it was contemplating backing out if it delayed much longer.
The idea of backing out of the deal resulted from a claim by Vicente Aidan, a former IPI employee. The employee told CCC that the IH Group had no money and was a scam. He claimed that after some digging into the company, it was discovered that the Rota phone number in the CNMI did not work.
The IH Group headquarters in South Korea were also reportedly visited; however, there was no indication the company was there. The company’s website, ihgroup.kr, is currently down for maintenance; however, it previously claimed that it had a casino hotel as well as a shopping mall in Rota.
Rota International Airport was also mentioned as part of the establishment’s development work. As a result of Aldan’s assertions, the South Korean company threatened to sue the former IPI employee.
Things are still looking dire for both IPI and CCC. The company’s continued inability to pay its debts is reportedly affecting both the CCC and the CNMI. During last week’s meeting, the CCC revealed that they were still contemplating permanently revoking the company’s casino license and may move on with it if the situation continues till the end of the month.
Edward C. Deleon Guerrero, the Chair of CCC, said, “IPI’s failure to meet these obligations is the reason [we have] cut back from close to 50 employees to [only nine]. That’s why the revocation is in front of us.”