SOUTH EAST ASIA 48
MALAYSIA
Aggressive expansion triggers ratings downgrade Global ratings agency S&P has joined other analysts in expressing concern that Genting Bhd’s aggressive expansion plans overseas may weigh on earnings and weaken its cash flow.
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&P Global Ratings recently lowered its long-term issuer credit rating on Genting Bhd to ‘BBB+’ from ‘A-‘, citing increasing leverage from its acquisition plans. S&P also lowered its long-term issuer credit rating on its subsidiary Resorts World Las Vegas (RWLV) and the long-term issuer ratings of the company’s senior secured debt obligations to ‘BBB’ from ‘BBB+’. Genting Bhd is a diversified conglomerate with operations ranging from plantations
Asia Gaming Briefings | January 2020
to property. It owns Malaysia’s only casino operator and its sister company in Singapore, which operates Resorts World Sentosa, one of only two IRs in the island state. It is also developing an IR in Las Vegas and last year its Malaysian unit announced plans to privatise loss making Empire Resorts, the operator of Resorts World Catskills in New York, where it also operates Resorts World New York. Other group properties include Resorts World Bimini, Resorts World Birmingham
in the U.K. and Crockfords in Cairo, Egypt. “We downgraded Genting because we expect the company’s leverage and cash flow adequacy to weaken over the next 12-18 months, given its more aggressive expansion plans. We also believe the company’s risk appetite has increased,” the statement said. “In the past year, Genting acquired 49 percent of Empire and privatized the company at a time of ongoing expansion at subsidiaries Genting Singapore (GENS) and RWLV. This
