Genting Malaysia active, up on defending Empire stake buy

-A +A

KUALA LUMPUR (Aug 16): Shares in Genting Malaysia Bhd (GenM) edged up this morning in active trade after the group defended its RM538 million related party transaction in Empire Resorts Inc as a “worthwhile investment”.

At 9.15am, GenM added 0.65% or 2 sen to RM3.09 with 4.57 million shares traded.

It highlighted that Empire’s casino Resort World Catskills (RWC) is located in a prime location and is one of the newest and highest quality gaming assets in northeast US, as well as having access to the all-suite Kartrite Resort.

The group added that it was in a unique position to take advantage of synergies between its existing Resorts World New York (RWNY) casino and RWC, providing the two casinos economies of scale, as well as leveraging on their customer bases to form a combined marketing approach that is expected to maximise gaming revenue and improve margins.

Moreover, RWC is in prime position to take advantage of New York’s emerging Sports Wagering market and develop a video lottery facility in Orange County, New York, which is near premier outlet shopping mall Woodbury Commons, it said yesterday.

GenM bought a 46% stake in Empire from substantial shareholder and GenM chairman Tan Sri Lim Kok Thay for RM538 million, via Lim’s vehicle Kien Huat Realty III Ltd.

On Aug 9, Empire highlighted to shareholders via a filing on the US Securities and Exchange Commission (SEC) that it was mulling the option of filing for voluntary bankruptcy, thus making it easier to restructure its US$533.68 million pile of debt.

RWC’s revenue has not surpassed costs since its February 2018 opening, with Empire posting a US$73 million net loss for the six months ended June 30.