Genting Malaysia Bhd (GENM) announced its U.S. subsidiary Empire Resorts will sell a portfolio of non-gaming assets at its Resorts World Catskills property to a local development authority for $525 million as part of a sweeping plan to strengthen its balance sheet.
The assets – including the 332-room Resorts World Catskills hotel, the 99-room Alder Hotel, the Monster Golf Course, the RWC Epicenter entertainment venue and several restaurants – will be acquired by the Sullivan County Resort Facilities Local Development Corporation (SCRFLDC), a dispatch issued on Thursday informs.
Proceeds from the sale will be used to buy 1,554 acres of land from real estate trust EPR Properties for $201.3 million, redeem Empire’s outstanding $300 million senior unsecured notes due 2026, and provide about $10 million in surplus working capital, Genting said in a stock exchange filing.
Empire will then lease back the non-gaming assets from SCRFLDC until 2066 and operate them under a 20-year management agreement, renewable for two five-year terms.
The company said the restructuring will leave Empire debt-free, improve its cost structure by eliminating bond interest and lease payments, and give it long-term control over more than 1,500 acres of land in New York’s Catskills region, including 1,134 acres earmarked for future development.
SCRFLDC, backed by Sullivan County authorities, will operate the facilities as government-owned assets aimed at boosting local jobs and economic development.
“The proposal will reinforce Genting Malaysia’s long-term commitment to improving its competitive position within the New York State gaming market and the broader northeastern U.S. region”, the company said.
In its first quarter of FY25, GENM reported a core net profit of RM52 million ($12.2 million), marking a 78 percent decline year-on-year, with several brokerages have downgrading their estimates for the operator due to significant earnings pressure from weaker-than-expected performance in domestic and international operations.
