Shares in Malaysia’s Genting tumble by most in 28 years
Share in Genting plunged by the most in 28 years after the leisure group controlled by Malaysian billionaire Lim Kok Thay announced plans to raise about 1.25 billion ringgit (US$306 million) through a renounceable rights issue. The stock fell as much as 17 per cent to 1.56 ringgit, the biggest decline since 1998. The issue price would be fixed at a discount ranging between 25 and 30 per cent,…
Shares in Malaysia's Genting experienced its most significant drop in 28 years, plummeting by up to 17 percent to 1.56 ringgit. The decline occurred after the leisure group, controlled by billionaire Lim Kok Thay, announced plans for a renounceable rights issue to raise approximately 1.25 billion ringgit (US$306 million). The exercise, which would occur at a discount between 25 and 30 percent, would primarily be used to repay borrowings and boost working capital.
Genting faced mounting debt and declining profitability, with total borrowings reaching 45.3 billion ringgit by the end of June. Analysts, such as Samuel Yin from Maybank Investment Bank, expressed concerns over potential dilution in earnings per share and book value per share. Yin also highlighted the possibility of further equity fundraising efforts or reduced dividends, downgrading the stock to a "sell" recommendation from "buy."
The downgrade came as Genting Malaysia, a unit of the group, saw its shares plummet by nearly 8.1 percent, the most significant decline in over a year. Fitch Ratings had previously downgraded Genting to BBB- in September, predicting a slower pace of deleveraging due to substantial capital expenditure required to expand key properties in Singapore and New York. Despite winning a casino license in New York City, the company's financial challenges created significant concern among investors.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
