Genting Malaysia is preparing to inject another US$20 million into Empire Resorts Inc that will likely see it claim a majority share in the New York-based casino firm.
The company announced Friday that its wholly-owned subsidiary, Genting ER II LLC, has entered into a subscription agreement to subscribe for up to US$20 million in “Series L Preferred Stock” in Empire in order to boost the latter’s equity due to challenges arising from the COVID-19 pandemic.
Empire operates Resorts World Catskills and harness horseracing facility Monticello Raceway in the state of New York.
Genting Malaysia currently holds a 49% stake in Empire Resorts, with the remaining 51% held by Kien Huat Realty III Limited – the private investment vehicle of Genting Group Chairman and CEO Lim Kok Thay. Should both Genting Malaysia and Kien Huat both convert all of their outstanding series shares – including those comprising this latest US$20 million investment – into common stock, Genting Malaysia would hold a 58% stake in Empire by 2030.
This is not the first time the Malaysian casino operator has injected extra funding into the embattled US firm, which it acquired in partnership with Kien Huat via a takeover deal in 2019. Genting Malaysia had previously injected US$40 million in funding in March 2020, then another US$150 million last September.
On Friday, the company said further funds were needed to ensure Empire fulfilled its debt obligations after being forced to close for six months from March to September 2021 due to COVID-19.
“The Proposed Equity Injection will enable Empire to have funds to fulfill its financing conditions to complete the short-term refinancing plan,” Genting Malaysia said. “In addition, Empire will be able to prove out its business plan and continue with its long-term refinancing plans.
“The Proposed Equity Injection will also allow Genting Malaysia to continue securing its position to participate in the prospects and future growth of Empire, particularly in relation to the Orange County Opportunity and the potential expansion of sports betting opportunities within the state of New York.”