The Commonwealth of the Northern Mariana Islands (CNMI)’s casino regulator, the Commonwealth Casino Commission (CCC), revealed in a meeting late last week the full extent of Imperial Pacific International (IPI)’s financial troubles, reported Marianas Valley.
Obligations Continue to Grow
The CCC broke down all of IPI’s outstanding obligations to the CMNI government and showed that the troubled casino operator would soon be more than $100 million in debt while there was no sign that any of the $150 million of capital injection promised to the company by an investor would soon materialize.
It turned out that Imperial Pacific has failed to pay its license and regulatory fees in two consecutive years, 2020 and 2021, and there is a third looming on the horizon with another $15.5 million due in mid-August followed by regulatory fees on October 1, bringing the casino operator to a total of $103 million due in less than two months.
In June, IPI avoided losing its casino license in Saipan, the second-largest island of the Mariana Archipelago and part of the CNMI, after a judge of the US District Court of the Northern Mariana Islands issued a temporary restraining order to postpone with a month the CCC meeting aimed at revoking the license.
South Korean Investor to Save the Day
Following the court order, the regulator and the operator began settlement talks during which IPI stated that a cash injection of $150 million would soon arrive from South Korean investor IH Group which holds an interest in acquiring the operations of the casino and luxury accommodation of IPI’s casino property, Imperial Palace Casino in Saipan.
IH Group’s chairman Kyunan Kim, who recently toured the property, also promised to resume the hotel tower construction stating that the project would soon overcome its financial difficulties and “contribute greatly to the economic recovery of the CNMI.”
IPI landed in cold regulatory waters in May 2021 when the CCC suspended its casino license for unpaid license and regulatory fees, failure to meet the minimum capital requirements for operating a casino of $2 billion and to make the $20 million mandatory contribution to the community benefit fund in 2018 and 2019.
To make matters worse, IPI was facing a pile of unpaid debts to vendors and subcontractors for the construction related to the expansion of the Imperial Palace Casino.
To date, the capital injection has not materialized and the CCC and IPI have not reached an agreement. Moreover, the CCC was adamant during the meeting that a revocation of the casino operator’s license is still on the table.