Genting Malaysia, a well-known gaming and hospitality company, has announced a significant investment of US$100 million in its U.S. subsidiary, Empire Resorts. This brings Genting Malaysia’s total investment in Empire Resorts to an impressive US$724 million.
The investment is made through Genting ER II LLC, a wholly-owned subsidiary of Genting Malaysia, which will acquire “Series M Preferred Stock” of Empire Resorts. Of the total investment, US$58 million will go towards repaying a bank facility, while the remaining US$42 million will boost working capital.
Genting Malaysia currently holds a 49% stake in Empire Resorts, with the rest owned by Kien Huat Realty III Ltd. In the future, if Genting Malaysia chooses to convert all available stocks, its ownership stake could potentially increase to 89.6% by 2030. The company believes this increased ownership will help Empire Resorts reduce financial leverage and expenses, allowing them to focus on maximizing operational potential in the U.S.
Despite some analysts expressing skepticism about the investment due to Empire’s recent lack of profitability, there was no need for shareholder approval. Financial projections anticipate that Genting Malaysia’s partners may incur losses in the coming years.
In addition to this investment, Genting Malaysia is also bidding for a license in New York, competing against major industry players. If granted, license holders will be required to generate significant annual revenue and profit.
Analysts expect minimal impact on Genting Malaysia’s stock prices due to this investment, as Resorts World Genting in Malaysia is still recovering. They anticipate a strong performance in the future, driven by Malaysia’s visa waiver for Chinese and Indian tourists, along with operational improvements and narrowing losses from underperforming assets.
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