Global casino operator Genting Malaysia Bhd, controller of loss-making United States-based casino business Empire Resorts Inc, says the latter is to become “debt-free” via a deal that will see its non-gaming assets sold off for US$525.0-million in cash.
The money raised will enable Empire – an entity wholly owned by Genting Malaysia – to pay off US$300-million in 7.75-percent senior unsecured notes that had been due on November 1, 2026.
“The proceeds from the proposed disposal will enable Empire to fully redeem the Empire bond, resulting in Empire being debt-free,” said Friday’s statement to Bursa Malaysia.
Genting Malaysia added: “This allows Empire to continue its focus on improving operating performance and realising its full potential.”
Empire Resorts owns three businesses in the U.S. state of New York: the upstate casino complex Resorts World Catskills (pictured); Resorts World Hudson, a casino offering video lottery terminals; and mobile sports betting operation Resorts World Bet.
As per Friday’s statement, Empire Resorts is selling its non-gaming assets to Sullivan County Resort Facilities Local Development Corp (SCRFLDC) for US$525.0-million in cash.
Those assets are: the 332-room Resorts World Catskills hotel; the 99-room The Alder hotel at the same complex; the Monster Golf Club, an 18-hole course at the resort; the 2,500-seat RW Epicenter, a concert venue at Resorts World Catskills; and “multiple restaurants”.
Empire will then have a land lease deal with SCRFLDC through to February 15, 2066, for all land under the non-gaming assets. Empire will also have a 20-year management agreement – with automatic renewal for two successive five-year periods – with SCRFLDC to manage all the non-gaming assets.
From the balance of funds raised by disposal of non-gaming assets, Empire will buy 1,554.6 acres (629.1 hectares ) of land parcels from EPR Properties, a Missouri-based real estate investment trust, for US$201.3-million cash.
The land in question is connected to a project called Adelaar Resort, and includes Resorts World Catskills.
Land purchase
Genting Malaysia said in its Friday filing: “SCRFLDC will operate the acquired facilities as governmentally-owned and -operated facilities to relieve and reduce unemployment, promote and provide for additional employment, improve and maintain job opportunities, and lessen the burden of government and act in the public interest.”
The parent stated: “The proceeds from the proposed disposal will also allow Empire to own approximately 1,554.6 acres of land which will be unencumbered by debt.”
It added: “This strengthens the group’s asset base and long-term control over the land on which Resorts World Catskills’ gaming and non-gaming assets are built, i.e., 420 acres, in addition to 1,134.6 acres of vacant land which have development potential.”
Genting Malaysia said it was expected that Empire’s cost structure would be “enhanced due to the elimination of lease payments paid to EPR after the purchase of the land parcels from EPR and the extinguishment of interest on the Empire bond”.
There would be some offset for “general levy payments from the property owners – including Empire – paid to the County of Sullivan Industrial Development Agency, a New York public benefit corporation”.
Genting Malaysia said it was also anticipated that the disposal would “generate surplus cash of approximately US$10 million to Empire for general working capital purposes”.
“The proposal will reinforce Genting Malaysia’s long-term commitment to improve its competitive position within the New York State gaming market and the broader northeastern U.S. region,” it added.
Malaysia’s Genting group has submitted a proposal for a downstate casino licence in New York that has been described as a US$5.5-billion project.
In June, Genting Malaysia – which runs Malaysia’s only casino complex Resorts World Genting, as well as casinos in the United Kingdom, Egypt and the Bahamas –said it had completed its acquisition of the stake in Empire Resorts that it did not already control.
