Genting Malaysia's loss-making US unit sells assets for RM2.2bil
PETALING JAYA : Genting Malaysia Bhd's (GENM) loss-making US subsidiary Empire Resorts Inc (ERI) is disposing its non-casino properties in New York state for US$525 million (RM2.2 billion) to eliminate its debt, and purchase land.
GENM said the proposal will 'deliver long-term strategic and financial benefits' to ERI as the sale proceeds enables it to fully redeem its US$300 million (RM1.3 billion) bond due in November 2026.
This will make ERI – which has been recording losses for over two decades – debt-free.
'The proposal will reinforce GENM's long-term commitment to improve its competitive position within the New York state gaming market and the broader northeastern US region,' it said in a filing with Bursa Malaysia today.
GENM said the restructuring will lower financing costs, boost ERI's assets and add RM42.1 million in extra cash.
The deal will see ERI sell the 332-room Resorts World Catskills and the 99-room Alder Hotel, the 18-hole Monster golf course, the 2,500-seat RWC Epicenter, and restaurants to a local development body, Sullivan County Resort Facilities Local Development Corp (SCRFLDC).
Part of the sale proceeds will be used to buy 1,554.6 acres of land from EPR Properties for RM848 million. EPR is a US-listed real estate investment trust (REIT) that invests in entertainment properties.
The land includes 420 acres upon which Resorts World Catskills' assets sit, and 1,134.6 acres of vacant land with potential for future development.
ERI will also enter into a land lease with SCRFLDC through Feb 15, 2066 for all land under the non-gaming assets, and manage the assets under a 20-year agreement, with two automatic five-year renewals.
ERI and SCRFLDC are currently finalising terms for the sale, lease and management agreements.
Controversial US$41 million buyout
This exercise comes on the heels of GENM's controversial US$41 million (RM173 million) buyout of the remaining 51% of ERI it did not own from Kien Huat Realty III Ltd. This is the vehicle of the Lim family led by Lim Kok Thay, the son of Genting founder Lim Goh Tong.
Under the deal announced some three months ago, Kien Huat Realty III assigned a US$39.7 million (RM167 million) debt to GENM that ERI owed to it.
Some analysts labelled the acquisition 'expensive and potentially profit-dilutive', and concerns were raised that it was an unfavourable related party transaction (RPT).
Bursa also grilled GENM over the buyout, slapping the gaming and resort operator with 20 questions on the deal.
According to its 2024 annual report, Kok Thay, 73, and his son, Keong Hui, 40, have a deemed interest of 49.35% in GENM as of March 17, 2025.
Kok Thay is GENM's deputy chairman and chief executive while Keong Hui is the deputy chief executive and executive director.
GENM shares rose 3 sen or 1.5% to RM2.02 today, valuing the group at RM12 billion. Year to date, the stock is down 10.2%.
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