Last Friday Genting Malaysia broke the news that the company is willing to inject another US$20 million into Empire Resorts in order to lift the latter’s equity up. This will be done by Genting Malaysia’s fully-owned subsidiary Genting ER II LLC, which agreed to pour the US$20 million into “Series L Preferred Stock” in Empire Resorts.
The New York-based gambling operator currently has Resort World Catskill and horse racing property Monticello Raceway in the state, but the company is experiencing major financial turmoil. The unprecedented situation has taken its toll on the company’s welfare, due to many of the firm’s properties were either closed down or operated with a limited capacity.
Last Week Developments
The Malaysia corporation currently posses 49% of the NYS-based gambling company and the remaining 51% are owned by Kien Huat Realty III Limited, which is a private investment tool of Genting Group Chairman and CEO Lim Kok Thay. And if both sides convert their shared, and the latest US$20 financial injection into common stock, Genting Malaysia would be then in possession of 58% of the Empire Resorts’ stakes by 2030.
This will be the second time that the Malaysian gambling leader has invested in the financially troubled US gambling firm. The company was acquired in partnership with Kien Huat in the 2019 takeover deal. Previously the Asian operator has invested US$40 million in the company in March 2020, and another US$150 later in September.
The U.S. gambling corporation has suffered greatly due to the government implemented lockdown restrictions, which closed down many of the businesses in the state. The company’s gaming properties were shut down for a significant period of time from March 2020 to September 2020, thus accumulating severe financial difficulties along the way.
There was further development on the matter, after last Friday the corporation stated that additional funds will be needed in order for Empire Resorts to fulfill its financial obligations. The Malaysian firm stated that such equity injection will bring the US corporation a short-term solution to its refinancing objective. This will also allow Genting Malaysia to continue its participation in local prospects and growth of Empire Resorts.
Legal Action
At the beginning of March 2021 subsidiary company of Genting Malaysia – Genting America took legal action against numerous of its insurers. The company claimed that the insurers failed to provide cost coverage worth approximately US$500 million. American International Group and several other insurers have been taken into court after the company stated that its New York and Miami gambling facilities have not been reimbursed for the huge losses caused by the unprecedented situation.
Another NYS Property
Additionally, the Asian gambling giant has confirmed that it will be launching another gambling property in the state of New York. The new project will be located in Sullivan County’s Newburgh Mall, and the company will use the 68,877-square-foot site as a brand-new gambling facility. Such a project will prove to have a tremendous benefit for the area since it will create plenty of job opportunities and provide additional revenue to the state’s coffers.
Source: Blaschke, Ben “Genting Malaysia injects another US$20 million into Empire Resorts”, Inside Asian Gaming, March 21, 2021
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