PETALING JAYA: In justifying its investment in Empire Resorts Inc, Genting Malaysia Bhd said the corporate exercise would give the financially-troubled US casino operator an opportunity to resolve its liquidity challenges.
The group added that the investment would enable Empire Resorts to complete its projects and turn around its finances for the benefit of all stakeholders.
Genting Malaysia said this in response to a query by Bursa Malaysia following a recent news report which claimed that Empire Resorts was “on the brink of filing for bankruptcy”.
It noted that in its most recent quarterly report, Empire Resorts had identified multiple options to address its current liquidity challenges, including seeking arrangements to provide additional liquidity, making reductions to its cost structure, restructuring its and its subsidiaries existing debt terms and pursuing the joint non-binding proposal submitted by Genting Malaysia and Tan Sri Lim Kok Thay’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, which is listed on Nasdaq, from Kien Huat Realty.
A day after the announcement, Genting Malaysia shed almost RM3bil in market capitalisation, far more than the value of the transaction.
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