Hard Rock & GEK TERNA’s Ellinikon Mega Casino Project put on hold
Hard Rock and GEK TERNA’s mega casino project in the Ellinikon area of Greece has reportedly been put on hold as lenders have asked developers to agree upon new financing terms. The Ellinikon casino project includes the development of a five-star hotel with 3,500 well-furnished accommodation units spanning roughly 120,000 square meters. The development will reportedly also offer a spacious conference hall, shopping space, 10,000-seat arena, in addition to a gaming space spanning 15,000 square meters.
As per the initially-signed agreement, the investors agreed with the lenders (National Bank and Alpha Bank) to invest €250 million (approx. 274 million US dollars) in the planned development. The lenders have now asked Hard Rock and GEK TERNA to agree upon the financing terms that are different from those initially agreed. To be more specific, the lenders have asked the investors to pump the additional €120 million in the development. Some recent reports also claim that the investors want to withdraw from the project but the Greek government doesn’t want them to take such a drastic step.
The project is really crucial for the local government as it is expected to generate nearly €6 billion of revenues over the next three decades, with fiscal benefits estimated to be more than €200 million per annum for the same period. The government is expected to collect €3 billion in the form of gaming tax revenue, in addition to €1.1 billion and €800 million in the form of social contributions and income tax, respectively. Some top officials of the government are highly interested to move ahead with the project as it could become a significant source of tax revenue for the government.
With Piraeus Bank assuming the role of a mediator to pave way for the project to move forward, executives from the two main lenders reportedly said, “This is a complex project, the likes of which have not been done in Greece and which require significant capital.”
The other solution to push the massive casino project includes the Recovery Fund that would be capable of covering a 350 to 450 million slice of the investment.
For the Ellinikon casino project, Hard Rock has formed a joint venture (JV) with GEK TERNA on a stake basis of 51:49 per cent. However, as already mentioned above, the project is now in the doldrums as lenders are not satisfied with the initially-signed financing agreement.