# GEN Malaysia to inject fresh US$100 million into Empire resort

Casino developer Genting Malaysia Bhd said in a filing on Wednesday that it had agreed to join U.S.-based casino operator Empire Resorts Inc's "Series M" preferred shares for up to US$100 million. Genting Malaysia said the proposed stock investment would be "financed through internally generated funds."


1,000 "Series M" Preferred Shares may be converted to 100 million Empire Common Shares at any time after December 31, 2030 (before December 31, 2038).

Empire Resort became a union of vehicles owned by the Lim family, Genting Malaysia and Genting's dominant Malaysian dynasty, in 2019.

Empire Resorts has several U.S. gaming businesses. They include Casino Resort World Catskills (pictured), about 90 miles (144.8 km) from New York City, which began full-scale operations in January 2019, Resort World Hudson Valley, described as a 90,000-square-foot (8,361-square-meter) facility with 1,200 video lottery terminals, bars and lounges that opened in December 2022, and New York State's mobile sports betting business, which opened in March 2022.

Genting Malaysia, a promoter of the country's only licensed casino complex, Resort World Genting, said the proceeds from the "Series M" subscription will be used by Empire to "full repay working capital purposes and the existing banking facilities of approximately $58 million" held by Empire's holding company, Genting Empire Resorts LLC.

The equity infusion will "enable Empire to further optimize its capital structure by reducing the financial leverage of Empire and/or Genting Empire Resorts and the resulting interest costs," the filing said.

"This will allow for faster growth in Resort World Hudson Valley and allow Empire to continue to focus on enhancing Resort World Catskill's operational performance to realize its full potential," it added.

Genting Malaysia also said the training will allow the group to "strengthen its position and grow its market presence in the New York State gaming market, which is expanding to compete effectively in the northeastern United States."

Genting Malaysia is said to be one of the potential bidders for one of the three game permits in upstate New York. Many investment analysts have suggested that Genting Group could become a leader in New York.

In a note on Thursday, Maybank Investment Bank Bhd said it "does not seem kind" to recent deals involving Genting Malaysia and Empire.

"That said, it seems that there is a narrowing of room for more relevant party deals related to Empire," wrote analyst Samuel Yin Sao Yang.

Following the recent equity investment, Genting Malaysia's effective stake in Empire will "increase from 76% to 90%, bringing its total investment in Empire to $724.4 million," according to Yin.

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