KUALA LUMPUR: Genting Malaysia Bhd has defended its plan to acquire financially troubled Empire Resorts Inc, saying that the move will benefit all stakeholders.
"The company has carefully evaluated the investment into Empire Resorts and has deemed it a worthwhile investment based on numerous factors," it said.
Genting Malaysia was responding to a query from Bursa Malaysia Securities, the exchange operator, over its decision to buy a stake in the Nasdaq-listed from a trust controlled by Genting Group chairman and chief executive Tan Sri Lim Kok Thay.
Genting Malaysia told the exchange on Thursday that the proposed corporate exercise would give the US casino operator an opportunity to resolve its liquidity challenges.
It said the investment would enable Empire Resorts to complete its projects and turn around its finances.
In its recent quarterly report, Empire Resorts had identified multiple options to address its current liquidity challenges.
This includes seeking arrangements to provide additional liquidity, making reductions to its cost structure, restructuring its and its subsidiaries existing debt terms, as well as pursuing the joint non-binding proposal submitted by Genting Malaysia and Lim's Kien Huat Realty III Ltd.
"If these alternatives are unsuccessful, Empire Resorts has indicated that it may pursue a voluntary Chapter 11 bankruptcy proceeding in respect of its subsidiary that owns the Catskills casino operations.
"Genting Malaysia strongly believes that the proposal is the best alternative available for Empire Resorts' stockholders, and that the proposal is also in the best interest of Genting Malaysia's shareholders," it said.
Last Wednesday, Genting Malaysia announced that it was buying a 46% stake in the loss-making Empire Resorts for RM539mil. It is further proposing a joint venture between Genting Malaysia and Kien Huat to gain full control of Empire Resorts.
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