Genting defends Empire acquisition

Genting New York
Genting New York

Genting Malaysia has issued a statement defending its proposed acquisition of Empire Resorts saying the combination is in the best interests of both companies’ shareholders.

The company was replying to a letter from Bursa Malaysia asking for clarification of reports the U.S. operator is close to filing for Chapter 11 bankruptcy protection.

Genting said it believes that after reviewing Empire’s 10Q filings the company has enough liquidity to fund its obligations through to Q1, 2020.

“Furthermore, based on our analysis from public filings, we believe that, with immediate improvements to Empire’s operations following an expeditious consummation of the Proposed Merger, Empire’s present liquidity challenges can be met,” it said.

“GENM strongly believes that the proposal is the best alternative available to Empire’s stockholders and that the proposal is also in the best interests of GENM’s shareholders.” 

Genting points out it has participated in the New York Gaming market for almost a decade and currently operates Resorts World New York, the best performing asset in the market and one of the highest grossing slot operations in the world. 

“RWNY, under GENM’s leadership and management, has demonstrated a successful track record in New York both in terms of development and operations. The company has carefully evaluated the investment into Empire and has deemed it a worthwhile investment based on numerous factors.”

GENM said because of its established management in New York, it’s in a unique position to take advantage of synergies between its existing operations at RWNY and the RWC. The merger will provide economies of scale and allow both to leverage the customer bases of both New York operations to form a combined marketing approach. 

Earlier this month, Genting announced plans to privatize the currently-loss-making Empire, the company which owns and operates Resorts World Catskills in New York.

The announcement, however, saw Genting Malaysia shares tumble almost 12 percent. Genting said the acquisition will be made by its wholly-owned subsidiary Genting (USA), which will acquire 13.2 million shares in Empire Resorts Inc from its single largest shareholder, Kien Huat Realty III (KH) for $128.6 million. 

The 13.2 million shares represent around 46 percent of common stock of Empire Resorts Inc.