Genting Malaysia has further increased its investment into US-based Empire Resorts after subscribing to US$150 million in “Series L Preferred Stock” via its indirect wholly-owned subsidiary, Genting ER II LLC.
The subscription follows similar investments across multiple tranches since August 2019, when Genting Malaysia acquired a 49% stake in Empire, and takes its total capital injection in that time to US$520 million.
Empire, which counts the family trust of Genting Group Chairman and CEO Lim Kok Thay as its majority owner with a 51% stake, owns and operates New York casino Resorts World Catskills as well as Monticello Raceway.
Genting Malaysia said the proceeds from the subscription will be utilised by Empire to facilitate its long-term financing plan.
In a note, Nomura analysts Tushar Mohata and Alpa Aggarwal said Genting Malaysia investors would likely perceive this latest capital injection negatively, although they also pointed to an improve performance from RWC in recent months with EBITDA turning positive between May and July.
“Overall, Empire’s liquidity situation in the future should improve as a result,” the analysts said.
Mohata and Aggarwal also suggested that some of the funds could be put towards Resorts World Hudson Valley, located in Orange County, New York. Empire announced in June a proposal to transform a 90,000-square-foot space at a local mall into a “gaming and entertainment destination with approximately 1,300 video gaming machines and Resorts World’s signature lounge, Bar 360,” at a cost of US$32 million.
However, the analysts don’t expect the need for any further funding from Genting Malaysia in the near future.
“We believe that after this round of investment by Genting Malaysia, Empire is in a better position to be able to conclude its long-term refinancing plan, which should remove the need for future similar capital injections by Genting Malaysia, in our view,” Mohata and Aggarwal wrote.