Malaysian credit rating agency RAM Rating Services Bhd has affirmed the corporate credit ratings of Genting Bhd and its unit Genting Malaysia Bhd at ‘AA1’, with a ‘stable’ outlook.
Malaysia-based conglomerate Genting Bhd made a conditional voluntary takeover offer in mid-October for Genting Malaysia, aiming to delist the unit from Bursa Malaysia.
“In our review, we have assessed the impact of potential material financial outlays for the proposed privatisation of Genting Malaysia,” wrote analysts Ben Inn and Thong Mun Wai in a Wednesday memo.
“In our view, a full privatisation of Genting Malaysia is unlikely at the current offer price,” they observed.
The analysts added: “Assuming a more moderate take up rate for this debt-funded privatisation, coupled with other planned capex and investments, our projections indicate the [Genting] group’s net debts to rise above MYR27 billion [US$6.39 billion] in the period up to fiscal 2027.”
According to the RAM Ratings team, such effort could result in net gearing ratios for Genting Bhd “exceeding 0.50 times while its funds from operations net debt coverage may dip below 0.35 times, over the next three years”.
“At these levels, Genting’s debt metrics would be strained but still within the tolerance limit of its current rating,” the analysts observed.
But they added: “We caution that these metrics leave little headroom for the group to fund any other major investments. In particular, RAM’s financial projections have yet to factor the potential outlays in relation to Resorts World New York City’s bid for a downstate casino licence in New York.”
Genting Malaysia already operates a number of casinos around the world. The firm’s flagship property is Resorts World Genting, Malaysia’s sole licensed casino. The company also runs gaming operations in the United Kingdom, Egypt, the United States, and the Bahamas.
The group also runs the Resorts World Sentosa complex in Singapore, via Genting Singapore Ltd.
The rating agency said it would “reassess the financial impact” on Genting’s credit profile if the group “successfully obtains” a New York licence.
RAM Ratings also said it had not factored into its projections the potential sale of certain non-gaming assets of associated U.S. business Empire Resorts Inc to the Sullivan County Resort Facilities Local Development Corp in upstate New York.
Genting Malaysia announced in August that loss-making Empire Resorts was to become “debt-free” via a deal that will see some non-gaming assets sold off for US$525.0 million in cash.
That plan however has been delayed until January amid Genting Bhd’s bid to buy out shareholders in Genting Malaysia. As a result, the group can’t enter into other material transactions in the meantime, said Walter Bogumil, chief financial officer of Resorts World US, in a letter that was read at a meeting of the Sullivan County Resorts Facilities Local Development Corp, cited by financial news outlet Bloomberg.
RAM Ratings said in Wednesday’s report: “In affirming the rating, we take comfort in Genting’s strong cashflow generation and liquidity to support its increased debt load and debt servicing capacity.”
“Genting’s revenue and earnings should improve more meaningfully in fiscal 2026 and 2027,” added the institution.
