Maybank Investment Bank expressed positive surprise over Empire Resorts’ strategic restructuring proposal, which could significantly strengthen Genting Malaysia’s financial performance.
In its latest investment memo, Maybank analyst Samuel Yin Shao Yang noted that Empire’s plan to sell non-gaming assets, purchase land, reduce debt, and cut expenses could boost Genting Malaysia Berhad’s fiscal year 2026 earnings by 24 percent.
The proposal involves selling non-gaming assets — the 332-room Resorts World Catskills hotel, 99-room Alder Hotel, 18-hole Monster Golf Course, 2,500-seat RWC Epicenter, and multiple restaurants — to Sullivan County Resort Facilities Local Development Corp (SCRFLDC) for $525 million in cash.
Proceeds from the sale will allow Empire to acquire 1,554.6 acres of land from EPR Properties for $201.3 million and redeem its $300 million 7.75 percent Senior Unsecured Notes due November 1st, 2026.
According to Maybank, Empire will also enter a land lease agreement with SCRFLDC until February 15th, 2066, for the land under the non-gaming assets, alongside a 20+10-year management agreement to continue operating them.
‘The restructuring will enable Empire to cease lease payments to EPR, which we estimate at approximately $10 million per annum, and extinguish the interest expense on the SUN of $23.3 million per annum,’ Maybank wrote. ‘These two factors combined will boost Genting Malaysia’s earnings by $33.2 million (MYR140 million), or 24 percent of FY26E earnings.’
Enhanced asset position
After the transaction, Empire will retain 1,134.6 acres of vacant land for future development. Maybank, which currently assigns no valuation to Empire, noted that the deal could increase its sum-of-the-parts target price by 15 percent.
The disposal marks a significant turnaround for Empire, which has been loss-making since Genting Malaysia invested $765.4 million in the subsidiary. Fully redeeming the bond would leave Empire debt-free, allowing management to focus on operations.
Cautious optimism from analyst
Despite the positive outlook, Maybank maintained its MYR1.95 sum-of-the-parts target price but downgraded Genting Malaysia to ‘Hold’ from ‘Buy’, citing less than 10 percent upside including dividend yield. The bank said it would maintain earnings estimates and its target price pending the deal’s completion and Genting Malaysia’s upcoming second-quarter 2025 results.
Genting Malaysia operates Resorts World Genting in Malaysia, as well as gaming facilities in the UK, Egypt, and the Bahamas. It completed the acquisition of Empire Resorts in June this year.
The proposal highlights ‘Genting Malaysia’s long-term commitment to improve its competitive position within the New York State gaming market and the broader northeastern U.S. region,’ according to the company. Genting Malaysia has also submitted a $5.5 billion proposal for a downstate casino licence in New York.
Empire currently operates three businesses in New York State: Resorts World Catskills, Resorts World Hudson offering video lottery terminals, and the mobile sports betting platform Resorts World Bet. The transaction is also expected to generate about $10 million in surplus cash for working capital while strengthening Empire’s asset base and long-term control of strategic land holdings.
