Casino operator Genting Malaysia Bhd is selling its entire 16.87 percent stake in Genting Hong Kong Ltd for US$415 million, or US$0.29 per share.
The announcement was made last Friday. Both firms are part of the Malaysia-based conglomerate Genting group.
The exercise is to be completed on October 21.
Genting Malaysia had been looking for a buyer for its entire interest in casino ship operator and Philippines casino investor Genting Hong Kong since July last year. The stake – considered by the firm as a “non-core” asset – was controlled by an indirect wholly-owned subsidiary called Resorts World Ltd.
The purchaser was indentified in a Friday filing to Bursa Malaysia as Golden Hope Ltd. The firm is the trustee of Golden Hope Unit Trust, ultimately owned by a discretionary trust in which Genting Malaysia chairman and chief executive Lim Kok Thay and other family members are beneficiaries.
Golden Hope – in which Mr Lim is a director – already held a 47.22 percent direct stake in Genting Hong Kong prior to Friday’s purchase.
Genting Malaysia said in the Friday filing that the US$0.29 per share paid by Golden Hope represented an 8.2 percent premium to the volume weighted average market price of Genting Hong Kong shares during the five-day period ended September 29.
The Genting Malaysia shareholders had – under a renewed one-year disposal mandate given to the company in June – set the minimum disposal price per share for the Genting Hong Kong stake at US$0.29. Under a previous mandate, which expired on July 1, the minimum disposal price allowed had been set at US$0.33.
Genting Malaysia originally acquired the stake in Genting Hong Kong for US$604.1 million, or an average of US$0.42 per share.
Genting Malaysia said it would use the money raised “for investments and/or working capital”.
It added: “As part of its business strategy, Genting Malaysia group will from time to time identify and evaluate investment opportunities to strengthen and grow its business. However, at this point in time, the Genting Malaysia group has yet to identify any specific investment and as a result, the expected time frame for the utilisation of such cash proceeds cannot be determined at this juncture.”
Genting Malaysia recorded a year-on-year decline of 59.8 percent in net profit for the first quarter of 2016. The firm runs Resorts World Genting, Malaysia’s only casino resort, and operates casinos in the United States, the Bahamas and the United Kingdom.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia