Genting Providing More Financing to Empire Resorts

Posted on: December 6, 2022, 05:08h. 

Last updated on: December 6, 2022, 05:20h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Genting Malaysia Bhd. has provided more financing to its Empire Resorts unit. That’s as an entity tied to the Malaysian conglomerate recently purchased $100 million in preferred stock issued by the New York-based gaming company.

Empire Resorts
A rendering of Resorts World Casino in Hudson Valley, NY. Operator Empire Resorts landed more financing from parent Genting Malaysia. (Image: Hudson Valley Happenings)

Genting ER II LLC, which is a Delaware-based holding company, acquired the Series F preferred stock. The transaction was conducted with Kien Huat Realty III Ltd. That’s the family trust of Lim Kok Thay, the scion of the broader Genting empire. With the purchase of the preferred shares, Genting has invested $624 million in Empire Resorts.

Preferred stocks are considered hybrid securities because the shares have both equity and fixed income traits. This type of stock typically pays high dividends, making the asset class vulnerable to rising interest rates. However, preferreds are alluring to investors because companies must prioritize payment of those dividends. If an issuer misses a preferred dividend payment, its credit ratings can be lowered. Additionally, preferred shareholders are higher up the food chain than common stock investors in terms of claims should an issuer go bankrupt.

Previously , Empire Resorts was a publicly traded company, and an ailing one at that. It flirted with bankruptcy protection in 2019 prior to be taken private by Kien Huat Realty III and Genting. Those entities own 51% and 49%, respectively, of the New York gaming entity.

Things Looking Up for Empire Resorts

Empire Resorts is showing signs of working past previous issues and was positive on the basis of earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2021, highlighting what the company describes as an “upward trajectory.”

With improving profitability and a brighter outlook, the proposed Series F acquisition sets the stage for Genting Malaysia to further capitalize on the growth prospects of Empire and reinforce its position in the New York State gaming market,” according to the operator.

The company runs Resorts World Catskills, Monticello Raceway, sports betting operations in New York and the soon-to-open Resorts World Hudson Valley, which is expected to feature 1,200 gaming machines and food and beverage options.

The Resorts World slots-only venue in Queens, which is vying to procure a traditional casino license, is not part of the Empire Resorts portfolio.

Genting Active in the US

Considering it’s not a US-based company, Genting has an expansive portfolio here and is active across the country.

Last week, the company announced it is planning to sell some of its Miami real estate once planned for a casino, hoping to fetch $1 billion or more. As noted above, Genting is also angling to turn its Queens venue into a traditional casino with table games and a sportsbook — something industry observers widely expect will happen.

The company also owns and operates the $4.3 billion Resorts World Las Vegas on the Strip.