The planned sale of the non-gaming assets of New York state’s Resorts World Catskills (RWC) casino-resort could boost Genting Malaysia’s 2026 earnings by as much as 24%, said Maybank Investment bank in a Monday note.
As reported by IAG, Genting Malaysia’s wholly-owned subsidiary Empire Resorts is planning to sell the 332-room RWC 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 Corporation (SCRFLDC) for a cash consideration of US$525 million.
It will then purchase 1,554.6 acres of land parcels – including those associated with RWC – from real estate investment trust EPR Properties for US$201.3 million and enter into a 20-year management agreement with SCRFLDC to manage all of the non-gaming assets.
The transaction, if completed, will enable Empire to redeem its US$300 million 7.75% Senior Unsecured Notes due 1 November 2026, resulting in Empire becoming debt free.
In Monday’s note, Maybank IB analyst Samuel Yin Shao Yang said the cessation of existing lease payments by Empire to EPR will save the company around US$10 million a year while the absence of interest expense associated with the Senior Unsecured Notes will save US$23.3 million per year – therefore boosting estimated FY26 earnings by US$33.2 million or 24%.
Yin described the transaction as positive news from Empire but still downgraded Genting Malaysia to “HOLD” pending completion of the deal and the upcoming publication of its 2Q25 financial results.
In a separate note, Nomura’s Tushar Mohata and Alpa Aggarwal observed that Genting Malaysia’s stock has been recovering of late, up 40% since April although still down 8% since the start of the year.
“We attribute part of the recent recovery to incrementally positive news flow on the stock, such as dismissal of a complaint against Genting Malaysia regarding Resorts World Bahamas, Genting Malaysia getting key approvals for its bid for a downstate casino license in New York, the closure of its loss-making sportsbook at Resorts World Catskills [and] Thailand putting its casino plans on hold. We view the transaction to deleverage Empire as another positive step toward improving earnings.”
Like Maybank, however, Nomura is remaining cautious on the company’s outlook due to earnings remaining well below pre-COVID levels on the structurally high cost base of the company after undertaking substantial capex, which it says has not yet yielded desired returns.
RelatedPosts
