IPI offers ‘reset and recover’ plan

Imperial Pacific International (CNMI) LLC has outlined a “reset and recover strategy” that will involve a raft of amendment to the casino license agreement and new legislations that it says will enable it to solve its financial dilemma, finish its projects, and help the CNMI government in these challenging times.

Among the changes it is seeking is to allow it to make a partial payment on its casino license fee last year and the remaining amount to be paid in five tranches, reducing the annual fee paid to the Commonwealth Casino Commission, authorizing online gaming, separating the hotel and the casino, and extending the deadline to finish its Imperial Pacific Saipan.

With the CNMI government needing $5.68 million to prevent 180 furloughed government employees from being terminated, Imperial Pacific is now seeking legislative action to allow it to pay $5.7 million of its $15.5 million casino license fee, which was due last August. As for the remaining $9.8 million, IPI wants to be allowed to pay this in five installments.

In a letter last Tuesday to Senate President Jude U. Hofschneider (R-Tinian) and House Speaker Edmund S. Villagomez (R-Saipan), IPI chief executive officer Ray N. Yumul said reducing this year’s (2020-2021) casino license fee to $5.7 million and allowing IPI to pay a fraction of that ($5.7 million) will assist the government’s need for funds.

Yumul asked that the remaining amount of $9,802,570 of the license fee be paid over a period of five equal annual installments beginning on year 2023.

He said IPI offers this beneficial solution by paying a portion of the $15,502,570 annual casino license fee while knowing that casino operations will not be possible for this period.

Yumul said that in informing the Legislature of a looming reduction-in-force plan, Gov. Ralph DLG Torres said the administration needs $5,688,239 to prevent 180 government employees who have been furloughed from being terminated.

“Perhaps many more may succumb if no new economic activity develops as the year progresses on,” Yumul said.

He said IPI also requests for legislative action to reduce the $3-million annual regulatory fee that is due to the CCCC to an amount that is minimally required for the regulatory body to operate for the periods that IPI remains closed.

Yumul said IPI also believes that if allowed by the enactment of legislation to legalize online gaming—as was achieved in certain U.S. states such as New Jersey, Pennsylvania, and Michigan—IPI will be able to operate sooner and attract and invite players who prefer to stay-at-home to play.

He said IPI understands that there will be strict adherence to federal and CNMI laws that governs online gaming and money transactions to which IPI welcomes.

Yumul said IPI supports paying an additional annual fee for the license.

The CEO said IPI also asks the Legislature to pass legislation to allow it to separate the casino from the hotel. He said this will allow IPI to focus on gaming and for the Commonwealth Casino Commission to focus on regulating.

“Should legislation to separate the casino from the hotel come to fruition, IPI would be in a better position to seek additional investors to partner with to complete the hotel construction,” Yumul said.

Amendment 6 of the Casino License Agreement also extends the deadline for the completion of the initial gaming facility’s hotel to Feb. 28, 2021. Yumul said IPI will not be able to meet this deadline and is requesting to extend that deadline for another five years, or up to Feb. 28, 2026, to complete the construction of the initial gaming facility.

He said these requests, if approved, will enable IPI to be financially capable to settle all outstanding undisputed claims against it and will endeavor to resolve all cases before CNMI and federal courts, and settle taxes owed.

Yumul said times are extremely tough with no revenue coming into the company for close to a year and with no timetable for re-open, “IPI’s future as it lays is bleak.”

“IPI believes if given a moment of relief, it would be able to secure from its new investor fresh funding that would solve the financial dilemma it now faces,” he said.

The CEO they are now asking for the support of the community, the business partners and the government for its “reset and recover strategy.”

IPI projects that if it is to reopen on Aug. 12, 2021, it believes that international travel will still be closed due to COVID-19 and that it would be impossible to generate revenues from the local community to cover operational costs, the license, and regulatory fees.