Genting USA ups stake in Empire with RM534m share purchase


  • Corporate News
  • Tuesday, 05 Nov 2019

KUALA LUMPUR: Genting Malaysia Bhd's indirect unit Genting (USA) Ltd has purchased 12.20 million shares in Empire Resorts, Inc from Kien Huat Realty III Ltd for US$128.56mil (RM534mil).

Genting Malaysia announced to Bursa Malaysia that GenUSA bought the shares at US$9.74 per share on Monday.

“Following the proposed acquisition, GenUSA now holds a 38.3% equity stake in Empire on an undiluted basis and 33.3% on a fully diluted basis assuming full conversion of all preferred stock currently outstanding into Empire’s common stock, ” it said.

"The obligation of GenUSA and KH to consummate the proposed acquisition is independent of, and not conditional upon, the proposed merger," it said.

In early August, Genting Malaysia announced that it was buying a 46% stake in the loss-making Empire Resorts for RM539mil. Empire owns Catskills Casino in Upstate New York.

It had further proposed a joint venture between Genting Malaysia and Kien Huat to gain full control of Empire Resorts.

To recap, the JV was to resolve Empire’s current liquidity issue via privatisation and restructuring efforts. Empire Resorts’ earlier filing with the US Securities and Exchange Commission said that if it cannot secure financing to bail it out, it may have to go the bankruptcy route.

Analysts had then said Genting USA will need to inject its 46% stake in Empire and pay Kien Huat an additional US$9.4mil to be entitled to have a 49% stake in the JV company Hercules Topco LLC

Subsequently, GenUSA and KH will inject a further US$28.5mil (or RM119mil) and US$29.7mil (or RM124.1mil) respectively into Hercules, with most of the proceeds used to fund the privatisation of Empire.

Genting Malaysia will fork out a huge US$167mil cash to complete this JV proposal, including an initial stake acquisition of US$128.6mil (38% stake in Empire), US$9.4mil paid to Kien Huat and US$28.5mil (its 49% share of cash infusion to mostly fund Hercules to buy out minorities of Empire).


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