Key Moments:
- Genting Berhad launched a MYR5 billion (US$1.22 billion) Medium Term Notes Program to increase financial flexibility.
- Recent debt offerings have brought total issuances to MYR3 billion (US$729 million) in the past month.
- New York gaming license developments have positively impacted Genting Malaysia’s market outlook.
Expanding Debt Facilities to Support Ownership Goals
Genting Berhad has intensified its fundraising activities, unveiling a substantial Medium Term Notes Program and issuing new debt through various subsidiaries. These efforts aim to facilitate the parent company’s plan to take full control of Genting Malaysia Berhad. Earlier, a takeover bid concluded without delivering the ownership level necessary for Genting Malaysia’s privatization.
Details of Recent Debt Issuances
On December 5, filings indicated that Genting Berhad launched a MYR5 billion (US$1.22 billion) unrated Medium Term Notes Program via its wholly owned arm, Genting Vista Berhad. This facility, registered with the Malaysian Securities Commission, allows for debt instruments with at least one-year tenors and flexibility in coupon structures. Genting Berhad acts as the guarantor for all notes under this program.
In addition, the company conducted a MYR1.35 billion (US$328 million) medium-term note sale through Genting RMTN Berhad, leveraging an existing MYR10 billion (US$2.40 billion) note program. The notes, with a one-year duration, were placed at par and pay a rate pegged to one-month KLIBOR plus 1.8 percent. Including this deal and three others closed over the previous month, Genting Berhad’s recent debt issuance has now reached MYR3 billion (US$729 million).
| Issuer | Program Size | Recent Issuance | Coupon | Purpose |
|---|---|---|---|---|
| Genting Vista Berhad | MYR5 billion (US$1.22 billion) | – | Fixed/Floating (various) | Corporate and acquisition needs |
| Genting RMTN Berhad | MYR10 billion (US$2.40 billion) | MYR1.35 billion (US$328 million) | 1-month KLIBOR + 1.8% | Corporate and acquisition needs |
Supporting the Privatization Campaign
Genting Berhad has stated that a portion of these funds will go toward acquiring the remaining shares of Genting Malaysia that it does not already own. As of December 1, following the completion of its mandatory takeover offer, Genting Berhad’s stake in Genting Malaysia stood at 73.13 percent, just below the 75 percent threshold needed for privatization. In response, the company has resumed buying shares in the open market to bridge this gap.
Broader Application of Raised Capital
Apart from privatization financing, the MYR5 billion notes program is intended to meet several corporate purposes, such as operational expenses, working capital, capital investment, general investment, and refinancing or redeeming previously issued debt. The first note issuance from this program is expected to refinance medium-term notes issued earlier via Genting RMTN, used for past Genting Malaysia share purchases. The MYR1.35 billion issuance will similarly support both corporate and acquisition objectives, providing Genting with operational agility during its consolidation process.
Impact of U.S. Licensing Progress
Sentiment towards Genting Malaysia has turned more favorable in light of recent regulatory developments in the United States. The New York Gaming Facility Location Board has recommended Genting Malaysia among three operators to receive a full commercial casino license in the downstate region. If finalized, this license would permit expansion of the Resorts World New York City venue, presenting significant growth opportunities as Genting Berhad seeks greater control of its subsidiary.
The recent debt offering disclosures both referenced these U.S. prospects, suggesting that positive licensing progress plays an important role in the strategic consolidation of Genting Malaysia.
Pursuing Completion of the Takeover
Through continued note issuances, targeted share purchases, and strengthening operational prospects, Genting Berhad demonstrates clear intent to secure the resources required to meet privatization criteria. The company’s recent actions highlight its strategic focus and the financial determination underpinning its consolidation ambitions.
- Author
Daniel Williams
