PETALING JAYA, Genting Malaysia Bhd’s (GENM) loss-making US subsidiary, Empire Resorts Inc (ERI), is divesting its non-casino assets in New York state for US$525 million (RM2.2 billion) in a move to clear its debt and acquire new land.
GENM said the proposed deal will “deliver long-term strategic and financial benefits” as it allows ERI to fully redeem its US$300 million (RM1.3 billion) bond maturing in November 2026, leaving the unit debt-free for the first time in over two decades of losses.
Genting Malaysia’s US$41 million (RM173 million) buyout of Empire Resorts raised eyebrows among some investors and analysts.
“The proposal underlines GENM’s commitment to strengthening its competitive position in New York’s gaming market and the wider northeastern US region,” the group said in a Bursa Malaysia filing. The restructuring is expected to lower financing costs, increase ERI’s asset base, and provide RM42.1 million in additional cash.
Under the deal, ERI will sell the 332-room Resorts World Catskills, the 99-room Alder Hotel, the 18-hole Monster golf course, the 2,500-seat RWC Epicenter, and several restaurants to the Sullivan County Resort Facilities Local Development Corp (SCRFLDC).
Proceeds will also fund the RM848 million purchase of 1,554.6 acres of land from US-listed real estate investment trust EPR Properties. This includes 420 acres housing Resorts World Catskills and 1,134.6 acres of vacant land earmarked for future development.
ERI will lease back the land from SCRFLDC until 2066 and continue managing the assets under a 20-year agreement, with two automatic five-year renewals. Final terms for the sale, lease, and management deals are still being negotiated.
This restructuring follows GENM’s controversial US$41 million (RM173 million) acquisition of the remaining 51% stake in ERI from Kien Huat Realty III Ltd, the Lim family’s private vehicle. The deal, announced three months ago, also involved GENM taking over a US$39.7 million (RM167 million) debt ERI owed Kien Huat.
The transaction drew criticism from analysts as “expensive and potentially profit-dilutive,” raising concerns over related party dealings. Bursa Malaysia had also queried GENM extensively on the deal.
According to GENM’s 2024 annual report, deputy chairman and CEO Tan Sri Lim Kok Thay, 73, and his son, deputy CEO Datuk Lim Keong Hui, 40, hold a deemed interest of 49.35% in GENM through family stakes.
GENM’s shares gained three sen, or 1.5%, to close at RM2.02 today, giving the group a market capitalization of RM12 billion. However, the stock remains down 10.2% year-to-date.
