Genting Bhd Rights Issue Draws Maybank Sell Call

Malaysia’s Genting Bhd has proposed a rights issue that could raise the company about MYR1.25 billion ($306.1 million). The company is proposing a rights issue due to its need to manage its debts and fund its operations after registering losses amounting to MYR11.6 million attributable to the equity holders for the period ending December 31, 2025.

Genting disclosed the rights issue plan in its announcement to Bursa Malaysia. As per the filing, Genting intends to make a renounceable rights issue of ordinary shares. The rights issue price, entitlement basis, and entitlement date have still not been finalized.

The board will announce these details closer to the implementation period. According to Genting, this arrangement gives the company flexibility as it prepares for the planned fundraising exercise.

Funds Set for Debt and Operations

Genting said MYR800 million from the rights issue would be allocated to repay borrowings within 12 months from the issuance date. Another MYR429.5 million would be used for working capital during the same period.

The remaining MYR20.5 million is expected to cover expenses related to the rights issue. This proposal comes as the group continues to balance its ongoing requirements for operations and investments on one hand, and reduction of its borrowings on the other.

On June 30, the borrowings of Genting Bhd Group and its subsidiaries were MYR45.25 billion. The borrowings consisted of short-term borrowings were MYR9.68 billion, and long-term borrowings were MYR35.58 billion.

The interest charges of the borrowings ranged between 3.88% to 8.45%. The borrowings have been a major issue for the group, given its continued expenditure in various markets.

Maybank Cuts Its Rating

Maybank Investment Bank Bhd responded to the proposed rights issue by downgrading Genting Bhd shares to “sell” from its previous recommendation. The bank also lowered its target price to MYR1.49 per share.

Maybank analyst Samuel Yin Shao Yang said the proposed fundraising may result in only limited interest savings and debt reduction. He also noted that the issue could lead to significant dilution in earnings per share and book value per share.

The analyst added that the group could still pursue additional equity fundraising in the future or distribute fewer dividends. The concerns came after other credit agencies also flagged pressure on Genting’s financial position.

In early September, Fitch Ratings downgraded Genting Bhd, saying that substantial capital expenditure in Singapore and New York had slowed its efforts to reduce debt. S&P Global Ratings also said that the group had little room left for further earnings disappointment, as high spending and weak operating results continued to place its investment-grade rating at risk.

Resort Projects Remain in Focus

Genting Bhd is the parent company of Genting Singapore Ltd, which runs the casino complex Resorts World Sentosa. Genting Bhd also holds the ownership of Genting Malaysia Bhd, which operates the Resorts World Genting, Malaysia’s only licensed casino.

Genting Malaysia claims that it continues to emphasize operational discipline, yield management, cost management, and the enhancement of integrated resort offerings at Resorts World Genting. In the UK and Egypt, its operations continue to center around the enhancement of customer offerings and cost management.

Development Plans Continue

The group said upgrades and expansion at Resorts World Sentosa are designed to broaden the resort’s appeal, raise guest engagement and spending, encourage repeat visits, and improve efficiency as the new assets stabilize.

Genting is also continuing the phased development of Resorts World New York City as part of its earnings growth strategy. While moving forward with these projects, the company said it remains focused on strengthening its financial position through capital management and targeted allocation of resources.

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