GGRAsia – Capex for Genting Vegas finalised in Aug: analysts

Capex for Genting Vegas finalised in Aug: analysts

Jun 01, 2015 Newsdesk Top of the deck, World

The capital budget for Resorts World Las Vegas – reportedly the first Nevada casino venture from Malaysian conglomerate Genting Bhd – will not be finalised until August, said a note on Friday from Samuel Yin Shao Yang of Maybank IB Research.

The gaming resort (pictured in an artist’s rendering), on the site of the abandoned Echelon scheme at the north end of the Las Vegas Strip, had its ground breaking ceremony in May.

“Genting will not finalise a capex for Resorts World Las Vegas until August 2015 (Genting had once earmarked a US$4 billion capex for Resorts World Las Vegas),” wrote Mr Yin. “In that time, Genting may incur consultancy fees of US$30 million to USS50 million,” added the analyst.

In May 2014, when the Nevada Gaming Commission granted Genting Bhd preliminary approval of suitability, the venture was described in media reports as a US$4 billion project. The same reports had also referred to plans for four accommodation towers and a 175,000-square foot (16,258-sq metre) casino.

In a media statement accompanying the ground breaking this May, the firm referred to “three hotels” and “over 100,000 square feet of innovative gaming space”.

“In the most recent analyst call, Genting’s management mentioned that with the recent weakness in Chinese VIP trends expected to last for a long period of time, Genting has to rework its plans to make it more suited to market segments likely to be visiting the Vegas strip in the absence of these VIPs,” said a note on Monday from Tushar Mohata and Alpa Aggarwal, analysts at Japanese brokerage Nomura.

“We feel that the group might speed up the development of the… site as per its balance sheet funding capabilities once it secures an [Nevada] approval, and might do it with Genting Malaysia, which owns the group’s other gaming assets in the U.S.,” the Nomura team added, also mentioning Genting Bhd’s next board meeting in August as a likely time for further announcements on funding.

GGRAsia understands from industry sources that Genting has been examining the option of selling apartment space within the Las Vegas project.