Genting Malaysia Berhad has announced that its wholly-owned US subsidiary, Empire Resorts Inc., will enhance its capital structure and financial position which involves selling non-gaming assets, acquiring land, and redeeming a substantial bond.
The multi-part proposal includes the Proposed Disposal of Empire’s non-gaming assets to the Sullivan County Resort Facilities Local Development Corporation (SCRFLDC) for a cash consideration of USD525 million (approximately RM2.2 billion). The assets being sold include the Resorts World Catskills hotel, the Alder Hotel, a golf course, event space, and restaurants.
The group said tthe proceeds from the disposal will be used to achieve two key objectives for Empire:
Debt Redemption: Empire will fully redeem its USD300 million (RM1.3 billion) Senior Unsecured Notes, a move that will make the company debt-free.
Land Acquisition: Empire will purchase 1,554.6 acres of land from EPR Properties for USD201.3 million (RM848.1 million). This includes the land on which the casino and the sold non-gaming assets are located, as well as an additional 1,134.6 acres of vacant land with future development potential.
The company stated that this will strengthen its asset base and provide long-term control over its property without the burden of debt.
Despite the sale of its non-gaming assets, Empire will continue to manage them through a new 20-year management agreement with SCRFLDC, with the possibility of two five-year extensions. The company will also enter into a long-term land lease with SCRFLDC for the non-gaming assets, extending until February 15, 2066.
The proposal is expected to enhance Empire’s cost structure by eliminating lease payments to EPR and extinguishing interest on the redeemed bond. This is anticipated to generate a surplus of approximately USD10 million (RM42.1 million) for general working capital.
