Genting Malaysia Berhad (GENM) will be injecting another US$150 million (RM625 million) cash into the loss-making Empire Resorts Inc. This comes barely six months after the hilltop casino operator announced in March that it would be injecting US$40 million (RM174.8 million) into the Empire Resorts, via a subscription agreement for Empire Resorts’ Series G Preferred Stocks.
According to GENM, the company has entered into a new subscription agreement with the Empire Resorts in order to subscribe for Nasdaq-listed company’s Series L Preferred Stocks, with the proceeds used by the company for working capital and financing purposes. The Series L Preferred Stocks have a maturity date of 31 December 2038, and are also convertible into common stock at a conversion price of US$10 per common stock.
Genting ER II is a Delaware company, an indirect wholly-owned subsidiary of GENM. The equity injection will be funded through internally generated funds and bank borrowings. Additionally, the equity injection will enable GENM to continue securing its position to participate in the prospects and future growth of Empire, particularly in relation to the Orange Country Opportunity and the potential expansion of sports betting opportunities within the state of New York.
According to GENM, for the resumption of its operations at Resorts World Catskills (RWC), Empire requires working capital and needs funds to fulfil its short-term debt obligations within the next 6 months whilst it works on the bonds offering.
The Empire also has launched a US$475 million senior secured notes offering in July 2020, of which the proceeds are expected to be utilised to refinance its existing short-term financing facilities, fund interest reserve for the senior secured notes and excess liquidity for working capital purposes.
Even though, the US authorities has suspended in efforts to curb the spread of virus amid the worsening Covid-19 situation in March, and the RWC’s gaming revenue for the first two months of 2020 grew by 31% from the same period a year ago, the unforeseen and unprecedented situation arising from the Covid-19 pandemic had impacted Empire’s turnaround and long-term financing plans. Barring any unforeseen circumstances, the equity injection is expected to be completed by the end of 2020.
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