What's Happening?
Empire Resorts Inc, a subsidiary of Malaysia-based Genting Malaysia Berhad, has announced the sale of non-casino assets in the United States valued at approximately MYR2.2 billion. The assets include the 332-key Resorts World Catskills, the 99-room Alder Hotel, an 18-hole golf course, a 2,500-seat entertainment venue, and several restaurants. These properties will be sold to the Sullivan County Resort Facilities Local Development Corporation, a U.S.-based non-profit organization. Empire Resorts will lease back the land until 2066 and manage the non-casino assets under a 20-year management agreement, with two automatic five-year renewals. The proceeds from this divestment will be used to redeem approximately MYR1.3 billion in bonds, making Empire Resorts debt-free, and to acquire 1,554.6 acres of land from U.S.-based EPR Properties for MYR848.1 million.
Why It's Important?
This strategic divestment by Empire Resorts is significant as it aims to reduce financing costs and strengthen the company's asset base. By becoming debt-free, Empire Resorts can potentially improve its financial stability and operational efficiency. The acquisition of additional land from EPR Properties, including the Resorts World Catskills site, provides development opportunities that could enhance the company's long-term growth prospects. The transaction also reflects a broader trend of international companies restructuring their U.S. operations to optimize financial performance and asset management.
What's Next?
Following the divestment, Empire Resorts will focus on managing the non-casino assets under the new agreement, while exploring development opportunities on the newly acquired land. The restructuring is expected to generate MYR42.1 million in additional cash, which could be reinvested into further development projects or used to enhance existing operations. Stakeholders, including local government and community groups, may monitor the impact of these changes on local employment and economic activity.
Beyond the Headlines
The sale of non-casino assets to a non-profit organization suggests a shift towards community-focused management of these properties. This could lead to increased public access and utilization of the facilities, potentially benefiting local residents and businesses. The long-term lease and management agreement indicate a commitment to maintaining operational continuity and quality service, which may reassure existing customers and partners.
