Moody’s sees Genting Malaysia’s Empire Resorts deal as credit negative
Genting Malaysia plans to acquire the remaining 51 per cent of Empire Resorts shares.
Malaysia.- Moody’s has deemded as credit negative Genting Malaysia‘s plan to acquire the 51 per cent remaining share capital of Empire Resorts for US$41m. The agency noted that that the payment will be entirely from internal cash reserves and highlighted concerns about the financial performance of Empire Resorts.
It also noted that a US$40m debt owed by Empire to the Lim family’s investment company will be transferred to Genting Malaysia as a result of the deal. It added that Empire’s ongoing losses may lead Genting Bhd, via Genting Malaysia, to continue providing financial support. Empire has already received about US$750m in support from Genting Malaysia and reported a net loss of US$59m in 2024.
Empire Resorts operates three businesses in New York: the Resorts World Catskills casino complex, Resorts World Hudson (a casino with video lottery terminals), and Resorts World Bet (a mobile sports betting service).
Meanwhile, CreditSights has maintained its “outperform” rating for Genting Malaysia but also warns that the transaction could increase Genting Malaysia’s debt levels and raise concerns about related-party transactions.
Genting Malaysia reports net loss for Q4
Genting Malaysia’s fourth quarter revenue was flatish at RM2.68m (US$604.3m) while adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) was RM180.6m (US$41m), down 78.6 per cent year-on-year and 86.2 per cent quarter-on-quarter. The decline was mainly attributed to net unrealised foreign exchange translation losses on the group’s USD-denominated borrowings.
The company posted a loss before taxation (LBT) of RM368.2m and a net loss of RM485.6m. Excluding the effect of the unrealised foreign exchange translation, the group would have reported LBT of RM11.3m and a net loss of RM128.7m.
