MORE LAWSUITS

KUALA LUMPUR (Dec 26): Shares in Genting Bhd and its subsidiary Genting Malaysia Bhd (GenM) fell in the morning session today after the US$4 billion (RM16.7 billion) Resorts World Las Vegas casino and resort project in Las Vegas was sued by Wynn Resorts Holdings for copying its building design.

At 12.30pm, Genting fell 2.9% or 18 sen to RM6.05 while GenM fell 3.3% or 10 sen to RM2.93.

According to the Las Vegas Sun, Wynn has filed a federal trademark infringement lawsuit alleging that Resorts World Las Vegas wants to mislead the public to believe its new 3,000-room project is affiliated with Wynn.

The lawsuit filed on Dec 21 includes photos of bronze glass and horizontal design elements on the curved facade of the Resorts World property, which Wynn said looks similar to copyrighted design of Wynn properties in Las Vegas and the Chinese gambling enclave of Macau.

The sketches posted on Resorts World Las Vegas website on Aug 24 showed its tower stretching towards the Strip featuring a Chinese lantern hanging from the top. The exterior will also consist of smaller buildings designed in traditional Chinese architecture, an amphitheatre and a pool.

Resorts World Las Vegas is currently under construction on the Las Vegas Strip in Nevada and is planned to be completed in late 2020.

The Genting group has already been embroiled in a legal tussle of late, with GenM filling a lawsuit against Walt Disney Co (Disney) and Twenty-First Century Fox (Fox) for US$1 billion on Nov 27, for terminating an agreement to build a Fox World theme park in Genting Highlands.

Disney is in the midst of acquiring Fox for US$71.3 billion.

As concerns rise regarding its completion in early 2019, the group said in a Bursa Malaysia filing last Thursday (Dec 20), "The opening date of the outdoor theme park is dependent on the options to be pursued by Genting Malaysia."

Only fools will buy this counter. So much conflict.

https://www.theedgemarkets.com/article/kok-...ke-genting-msia


Kok Thay sells loss-making Empire Resorts stake to Genting Msia

KUALA LUMPUR (Aug 6): Tan Sri Lim Kok Thay, via Kien Huat Realty III Ltd, is selling 46% of the common stock in Nasdaq-listed gaming and entertainment company, Empire Resorts Inc, to Genting Malaysia Bhd (GenM) for US$128.6 million cash or RM538.8 million.

The related party transaction is priced at US$9.74 per share of the common stock, some 13.2 million in all, which represent about 35% of the outstanding voting power of Empire on a fully diluted basis, after conversion of all outstanding preferred stocks into common stocks.

Kien Huat currently controls 84% stake in Empire, which has been loss making for the past two decades, according to Bloomberg. Empire posted a net loss of US$155.36 million for the financial year ended Dec 31, 2018 — the biggest ever loss.


Following the proposed share acquisition, GenM and Kien Huat will join hands to take Empire private at the same consideration of US$9.74 per share of common stock.

GenM, in a stock exchange filing today, said it has inked a binding term sheet with Kien Huat for its wholly-owned Genting (USA) Ltd to undertake the acquisition, which GenM said will be funded by internal funds. As at March 31, 2019, GenM's cash and cash equivalents stood at RM7.92 billion, while its debts was at RM9.68 billion.

Empire owns and operates Resorts World Catskills (RWC), a casino resort situated on a 1,700-acre site in New York.

Empire also owns and operates Monticello Casino and Raceway (MCR), which began operations in 1958 in Monticello, New York, and features an electronic gaming machine and harness horse-racing facility. The EGM operations and food and beverage service at MCR ceased in April this year and was consolidated with RWC. Empire also has a sportsbook and digital gaming collaboration with an affiliate of Bet365 Group Ltd, a British online gaming company.

GenM said the proposed acquisition is subject to, among others, receipt of regulatory approvals, including approval by the New York State Gaming Commission (NYSGC) and satisfaction of applicable regulatory requirements.

It expects the proposed acquisition to be completed in the third or fourth quarter of this year. “If a merger agreement with Empire is entered into and such conditions precedent are satisfied or waived, we anticipate that the proposed merger could be completed by the fourth quarter of 2019,” GenM added.

GenM does not expect the proposed exercise to have any material effect on its consolidated earnings and earnings per share for the financial year ending Dec 31, 2019 (FY19).

The casino operator said the rationale of the stake acquisition is to better position the Resorts World brand in the North-Eastern US gaming market, through more effective cross marketing with Resorts World Casino New York City.

Genting Malaysia loses RM3.15b market cap on earnings erosion risks

KUALA LUMPUR (Aug 7): Genting Malaysia Bhd (GenM) saw as much as RM3.15 billion in market capitalisation wiped off as its share price tumbled as low as 14.68% or 53 sen to RM3.08 at the early morning trade, after the firm acquired 46% of the common stock in Nasdaq-listed gaming and entertainment company Empire Resorts Inc from Tan Sri Lim Kok Thay, via Kien Huat Realty III Ltd.

At 11am, GenM's share price pared some of its losses to trade at RM3.22, which is 39 sen or 10.8% lower than yesterday's closing price of RM3.61, making it the top loser across Bursa Malaysia this morning. The share price also valued it at a market capitalisation of some RM21.44 billion.

GenM's trading volume also surged to some 176.86 million shares, making it the most actively traded counter this morning.

GenM, in a stock exchange filing yesterday, said it has inked a binding term sheet with Kien Huat for its wholly-owned Genting (USA) Ltd to undertake the acquisition, which GenM said will be funded by internal funds.

Empire owns and operates Resorts World Catskills (RWC), a casino resort situated on a 1,700-acre site in New York.

As at March 31, 2019, GenM's cash and cash equivalents stood at RM7.92 billion, while its debts stood at RM9.68 billion.

Meanwhile, Hong Leong Investment Bank (HLIB) today downgraded GenM to hold (from buy previously), with a lower target price of RM3.79 (from RM4.21 previously), to reflect the risk of short-term earnings erosion in relation to the acquisition of loss-making New York-based firm from Lim.

HLIB said it views the acquisition as negative and the acquisition price implies a premium to book value despite Empire Resorts Inc still recording losses.

HLIB noted that Empire Resorts had registered losses of US$25 million to US$46 million in the preceding three years.

"FY18, Empire recorded a loss of US$138 million which was largely attributed to the high start-up expenses incurred for the commencement of Resorts World Catskills (RWC) (1Q19 net loss widened by 43% year-on-year to US$37.6million).

"Assuming Empire's FY20 registers a loss similar to that of FY18, we note that the impact to GenM's bottomline will be approximately -RM283 million (circa 23% of our FY20 earnings forecast)," the research house added.

However, HLIB has maintained its forecast for GenM pending more clarity on Empire Resorts' earnings outlook, which at the moment is currently loss-making.

Empire Resorts on the brink of filing for bankruptcy

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KUALA LUMPUR: Empire Resorts, Inc, in which Genting Malaysia Bhd (GenM) will buy a 46% stake from controlling shareholder Tan Sri Lim Kok Thay for US$128 million (RM538 million), is facing a liquidity problem so severe, it has prompted the US-based casino operator to consider filing for voluntary Chapter 11 bankruptcy.

To keep it going, Empire, in which Lim now controls 84% via Kien Huat Realty III Ltd, has revealed it is in dire need of fresh capital through a cash call, or a restructuring of its whopping debt of over US$400 million.

The news sent the Nasdaq-listed company’s share price on a dive to as low as US$8.11 yesterday — down US$1.23 or over 13%. At the time of writing, it was trading at US$8.26 apiece, down US$1.08 or 11.56%.

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Last Friday, debt-laden Empire highlighted to shareholders the option of filing for voluntary bankruptcy in the announcement of its second-quarter financials to the US Securities and Exchange Commission (SEC), noting the option would enable it to easier restructure its borrowings.

“We can offer no assurance that we will be in compliance with all obligations and covenants measured as of future quarterly periods within the next 12 months or that we will be able to obtain waivers or other relief from the lenders, if necessary.

“If the company determines to not make a specified equity contribution, or interest and principal payments as they become due, unless the lenders under the term loan facility and revolving credit facility waive or eliminate the financial covenants, or otherwise restructure our existing debt agreements, Montreign Operating [Company, LLC] will be in default under these agreements and the lenders under such agreements can immediately declare all loans due and payable,” said the US casino operator, adding that Montreign Operating would likely be unable to pay all such obligations.

Montreign Operating, its indirect wholly-owned subsidiary, owns and operates Resorts World Catskills, a casino resort on a 1,700-acre (687.97ha) site of a four-season destination resort in Sullivan County, New York. It is approximately 90 miles (144.84km) from New York City.

The casino’s revenues have not surpassed costs since its opening in February 2018. Hence, Empire is currently generating operating losses, with a net loss of US$73 million in the six months ended June 30.

Empire’s long-term debt of US$533.68 million includes the Term A Loan amounting to US$60.4 million and Term B Loan totalling US$439.1 million. The Term A Loan will mature on Jan 24, 2022 and the Term B Loan on Jan 24, 2023, according to the filing with the SEC.

“Given our continuing negative cash flows from operations, and to meet our expected cash needs for the next 12 months and over the longer term, we will be required to obtain additional liquidity sources or possibly restructure our existing debt and other obligations.

“If acceptable terms of a restructuring cannot be accomplished, we may not have enough cash and working capital to fund operations, and satisfy the obligations of, Montreign Operating beyond the near term, which raises substantial doubt on our ability to continue as a going concern,” said Empire in the filing.

“As a result, we may be required to seek to implement an in-court proceeding under Chapter 11 of the US Bankruptcy Code ... if we commence a voluntary Chapter 11 bankruptcy case, we will attempt to make arrangements with new and existing creditors for additional liquidity facilities and the restructuring of Montreign Operating’s existing debt terms before presenting these arrangements to the bankruptcy court for approval.

“An in-court restructuring proceeding would cause a default on our debt with our current lenders,” it explained.

Empire also said on July 25, the Special Committee of its board of directors received a letter from Kien Huat indicating Kien Huat did not intend to provide further equity or debt financing to the company beyond its obligations under the Kien Huat Preferred Stock Commitment while the company remains a public company. Subsequently on Aug 5, the Special Committee received a non-binding proposal letter from Kien Huat, GenM and an affiliate of Kien Huat to buy the shares they do not already own for US$9.74 per common share — which is now higher than Empire’s current market price — according to the filing.

To recap, news of GenM buying the 46% stake in loss-making Empire from Kien Huat, Lim’s investment vehicle, had sparked fierce selling of its shares as well as those of its parent, Genting Bhd.

Some RM2.6 billion was wiped from GenM’s market capitalisation last Wednesday, and Genting saw RM1.8 billion evaporated following news of the related party transaction.

Judging by Empire’s latest announcement, it is likely its shareholders, including GenM, will have to inject more capital to sustain Resorts World Catskills’ operations moving forward.

In short, the substantial stake in Empire will cost GenM more than RM538.8 million in cash. Further, it is uncertain how long the casino outside of New York City will take to earn enough revenue to at least cover operating costs.

https://www.msn.com/en-my/money/topstories/...XAtz?li=BBr8Hnu


So this fella gets paid millions to screw his shareholders?

Genting Malaysia defends Empire stake buy, says it’s 'worthwhile investment'

KUALA LUMPUR (Aug 15): Genting Malaysia Bhd (GenM) says its RM538 million related party transaction (RPT) in Empire Resorts Inc is deemed a “worthwhile investment”.

GenM said this in a filing today after Bursa Malaysia asked the gaming group to confirm or deny the contents of The Edge Financial Daily’s article on the RPT, published on Tuesday.

The group said Empire’s casino resort, Resorts World Catskills (RWC), located in Sullivan County, near New York City, is one of the newest and highest quality gaming assets in northeast US, with more than US$900 million invested.

“It is one of the closest gaming facilities to New York City offering live table games, including Baccarat and Blackjack,” the group said.

It added that RWC is part of development that includes the US$200 million Kartrite Resort, which the group described as “one of the most modern and state-of-the-art indoor waterpark developments” in the US, which boasts 324 new all-suite luxury rooms.

GenM added that it was in a unique position to take advantage of synergies between its existing Resorts World New York (RWNY) casino and RWC, thus providing the two casinos economies of scale, which will see costs reducing and earnings rising.

Furthermore, GenM said the group will be able to leverage the customer bases of both casinos to form a combined marketing approach that is expected to maximise gaming revenue while improving margins.

“RWC is in a favourable position to take advantage of the emerging Sports Wagering market in New York. Empire is opening an on-site sportsbook and is in a prime position in the eventuality of the enactment of mobile sports betting,” said GenM.

In addition, GenM said RWC has the opportunity to develop a video lottery facility in Orange County, New York, which is adjacent to Woodbury Commons — a premier outlet shopping mall.

“Successful execution of the proposed merger would place GenM in a position to more deeply access the New York market and provide both GenM and Empire the opportunity to compete more effectively in northeastern US region’s current competitive gaming landscape,” said GenM.

It added that the acquisition allows for Empire to complete its projects and embark “on a path to stability and growth for the benefit of all stakeholders”.

GenM bought a 46% stake in Empire from substantial shareholder and GenM chairman Tan Sri Lim Kok Thay for RM538 million, via Lim’s vehicle Kien Huat Realty III Ltd.

On Aug 9, Empire highlighted to shareholders via a filing on the US Securities and Exchange Commission (SEC) that it was mulling the option of filing for voluntary bankruptcy, thus making it easier to restructure its US$533.68 million pile of debt.

RWC’s revenue has not surpassed costs since its February 2018 opening, with Empire posting a US$73 million net loss for the six months ended June 30.

Shares in GenM closed four sen or 1.29% lower at RM3.07, valuing the group at RM18.23 billion.


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In another edge report its states that " The RPT does not need shareholders' approval."

Totally made for conflict of interest transactions!

If good investment, the dude will not sell it to you lah! He is just fleecing Genting forever.