Genting Malaysia Berhad (GENM) has surprised the industry with its plans to invest $100 million into Empire Resorts, one of its US-facing subsidiaries. The company made this announcement in a filing with the Bursa Malaysia Securities on January 10, 2024.
The investment will be completed through Genting Malaysia’s indirect wholly-owned subsidiary, Genting ER II LLC, which has entered into a Subscription Agreement to subscribe up to $100 million of Series M Preferred Stock of Empire.
Of the $100 million investment, $42 million will be used as working capital, while $58 million will be used to fully repay an existing bank facility.
This is not the first time Genting Malaysia has invested in Empire Resorts, as its initial investment dates back to August 2019, bringing the total investment to over $700 million.
According to a filing with the Bursa Malaysia Securities, the proposed equity injection aims to propel Empire’s growth and expansion. Empire currently operates mobile sports wagering in New York and also runs Resorts World Hudson Valley and Resorts World Catskills, two casino and entertainment locations.
Genting Malaysia believes that the proposed equity injection will help Empire optimize its capital structure, reduce financial leverage, and lower interest expenses. It will also strengthen the operations of Resorts World Catskills and have a positive impact on Resorts World Hudson Valley.
Ultimately, the proposed investment is expected to strengthen Genting Malaysia’s presence in the gambling sector and support its expansion in key markets such as New York and the Northeastern US. This move demonstrates Genting Malaysia’s commitment to growing its investment in its US-facing subsidiaries and solidifying its position in the leisure and hospitality industry.