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Economy

Hellenikon Casino Bidder Mohegan Seeking $100 Million Loan

Mohegan Gaming & Entertainment (MG&E), the only bidder left for a casino for the long-stalled 8-billion euro ($8.78 billion) development of the abandoned Hellenikon International Airport site on Athens’ coast, is trying to borrow $100 million to keep alive its casinos closed by the COVID-19 Coronavirus lockdowns.

The company missed a self-imposed deadline, the financial news agency Bloomberg said, with some investors wary over the company seeking funding while it’s trying to stay afloat and expand, including for Greece’s biggest project.

Earlier in May, Greece’s top administrative court rejected an injunction filed by the only other bidder, the rival U.S. group Hard Rock International, to prevent an awarding of the license after it had been ruled out over a technicality.

That came after Mohegan was reported at risk of default, said Moody's Investors Service, the casino bleeding revenue during the virus lockdown that kept the doors shut to customers and cut into its plans for international expansion, including to Greece.

A group of Mohegan lenders tapped investment bankers at Rothschild & Co. as financial advisers while negotiations continue, reported Bloomberg, citing sources that weren’t identified but said close to the discussions.

Representatives for Credit Suisse Group AG, which is leading the loan offering, and for Rothschild declined to comment, while Mohegan didn’t respond to the news agency’s request for comment.

The company had offered to pay a yield of over 14% for a new loan maturing in October 2021, the source said, and tried to change lending agreements known as covenants on its existing loans to give it flexibility to get through its cash shortfall.

The company is an extension of the Mohegan tribe in Connecticut and operates the Mohegan Sun there and other casinos in the United States as well.

Some investors were also said to be anxious about how much the collateral backing the debt will be worth to them. The loans have first claim on the company’s assets if it fails but some Mohegan casinos are on Native American tribal land and that could limit investors rights to seize and liquidate assets.

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