Genting International (GIL), incorporated in Aug 1984, was formed by Genting Bhd to undertake the expansion of the Genting Group's leisure, hospitality and gaming activities outside of Malaysia. Genting will hold a 54.1% stake in GIL post public offer and share placement exercise.
Currently, GIL owns (50% stake) and runs the Maxims Casino Club in Kensington, London (38.1% of 1H05 revenue). Maxims is an exclusive high-end casino with 20 table games. Besides that, GIL provides IT application-related services (28.9% of 1H05 revenue) to the Genting Group, which includes gaming technology R&D and systems integration services. GIL also exclusively provide sales & marketing services for Genting Highlands outside Malaysia (21.6% of 1H05 revenue). In addition, GIL owns a 29.8% stake in London Clubs Int'l (LCI) and 20.0% stake in Stanley Leisure, 2 casino incumbents in the UK.
Strategy
Tendering for integrated resorts in Singapore. GIL, together with Star Cruises, has made a joint bid for Singapore's Integrated Resorts at Marina Bayfront and Sentosa Island. At present, only 5 bidders remain for the downtown Marina Bayfront site. For the Sentosa Island site, GIL has entered into an exclusive MOU with Universal Parks and Resorts, for the design of a Universal Studios Theme Park.
Expand presence in the UK. GIL has already built up its presence in the UK gaming industry via its stakes in Stanley Leisure (41 casinos in UK) and LCI (7 casinos in UK). Together with Stanley Leisure, GIL has also established a joint venture (JV) company to tender for regional casino licences. GIL plans to make further strategic investments or collaborations in the UK, if and when such opportunities arise.
Exploring entry into Macau and other suitable markets. Management is exploring suitable opportunities in the Macau gaming market through strategic acquisitions, collaborations or other forms of investments. At present, Executive Chairman Tan Sri Lim Kok Thay has an indirect 3.2% stake in Galaxy Entertainment (Hong Kong listed), parent company of Galaxy Casino in Macau. Galaxy Casino is a Macau casino concession holder and the operator of the Waldo Hotel, Macau. Aside from Macau, GIL will source for potential investment opportunities in Thailand, Japan, South Korea and Taiwan, which are considering the legalisation of casino gaming.
Competitive Strengths
Over 20 years of experience. The Genting group has over 20 years of experience in the bidding, establishment, development and management of international integrated resorts. Track record includes the Burswood Resort (Perth, Australia), the Lucayan Beach Resort and Casino (Bahamas) and the Subic Bay Resort and Casino (Philippines).
Strong parent company. GIL can leverage on the financial strength and operational track record of its parent company, Genting Bhd (listed in Malaysia). Genting has a net cash of RM2.6b as at end-3Q05. Therefore, GIL should have little problems in raising cash (via rights issue or loans) to undertake a big integrated resort project. In terms of operational track record, Genting has a 40-year track record at operating the successful Genting Highlands Resort in Malaysia.
Experienced management team. Executive Chairman, Tan Sri Lim Kok Thay has more than 20 years of experience in the leisure, hospitality and gaming industries. His experience includes the operation of the Genting Highlands Resort, the development of international integrated resorts and the establishment of Star Cruises, the 3rd largest cruise operator in the world. Managing Director, Justin Tan Wah Joo also has more than 20 years of experience in the industry.
Risks
Overseas gaming ventures may not take off. GIL faces stiff competition in its bid for Singapore's Integrated Resorts, especially from established Las Vegas operators such as Harrah's Entertainment, Las Vegas Sands and MGM Mirage. GIL may also be unable to find profitable investment opportunities or form suitable collaborations in Macau. In addition, the Great Britain Gaming Act (GBGA) currently allows for the establishment of 1 regional, 8 large and 8 small new casinos in the UK. GIL (via JV with Stanley Leisure) may not win any of these new licences. In addition, it is not certain whether the GBGA would eventually increase the number of regional casino licences.
Valuation
GIL's current RNAV/share stands at 25.2 cents, based on our estimates. However, this does not include the value from potential expansion into Singapore, Macau, UK and elsewhere.
SINGAPORE (Dow Jones)--Casino operator Genting International Ltd. (G16.SG) made a strong debut on the Singapore Exchange Monday, fueled by hopes of success in its bid to build Singapore's first casino and attractive valuations.
The company, which operates Malaysia's only casino and previously was traded on Singapore's over-the-counter market, closed at S$0.38, a 8.6% premium to its initial public offer price of S$0.35.
It was also the day's most actively traded stock with 272.4 million shares changing hands, or 30% of total volume on the bourse.
Among the stock's attractions was its relatively cheap valuation.
The company's RNAV, or revalued net asset value, per share is estimated at S$0.25, without including the benefits from potential expansion into Singapore, Macao, the U.K., and elsewhere, stockbroking firm UOB-Kay Hian said in a note earlier Monday.
Traders said investors were hoping that possible success in its bid to build either or both of Singapore's two proposed integrated resort may push its valuations even higher.
The Genting group is one of five consortia still in the running to build the resorts. According to analysts, the two casino resorts will probably cost a total of US$5 billion - about US$3 billion for the Marina Bay resort and US$2 billion for the Sentosa Island project. Genting sold 800 million new shares in its IPO, which was 8.1 times subscribed.
Genting International's IPO was comprised of 750 million placement shares, which were 7.8 times subscribed, and 50 million retail shares, which attracted interest of about 13.8 times.
As a result of strong demand, Genting decided to allot another 101.9 million shares to retail investors, representing nearly all of the 103.4 million shares under the over-allotment option.
Its IPO, which was launched on Dec. 2, closed on Dec. 8 and is estimated to have raised about S$350 million (US$208 million) in gross proceeds for the company.
Yes, the list is now down to 5 bidders for the IR, with Genting still in the race. Although I think the likely winner will be either the Capitaland or Kepland led ones, Genting share price will likely hv strong volatility, leading up to the announcement of the bid winner next yr. So, there'll be good trading opportunities for this stock :D
Wynn Didn't Complete Singapore Casino Bid Probity Check (This story was first published at 1514 GMT Friday)
SINGAPORE (Dow Jones)--Wynn Resorts Ltd. (WYNN), controlled by Las Vegas casino operator Steve Wynn, appears to have become the third bidder this week to withdraw from the tender process for Singapore's first casino after it didn't submit to a mandatory background check.
Bidders for the Marina Bay casino and resort were asked by the city-state's government to submit corporate and personal history forms by Friday so that probity checks could be completed.
According to an e-mail from the Singapore Tourism Authority, the five bidding groups that submitted the forms are: Malaysia-based Genting International PLC (G16.SG) and Star Cruises; Harrah's Entertainment Inc. (HET) and Keppel Land Ltd. (K17.SG); Las Vegas Sands Corp. (LVS); MGM Mirage (MGM) and Southeast Asia's largest property developer Capitaland Ltd. (C31.SG); Macau casino baron Stanley Ho's Melco International Ltd. (0200.HK) and Australian tycoon Kerry Packer's Publishing & Broadcasting Ltd. (PBL.AU).
Wynn Resorts couldn't be immediately reached for comment.
Like the other bidders, Wynn paid S$10,000 for the official tender documents that provided government guidelines on how the casino and resort should be built and operated.
Australian casino operator Tabcorp Holdings Ltd. (TAH.AU) and Guocoland Ltd. (F17.SG), a Singapore property developer, earlier this week withdrew their Marina Bay bids.
Tabcorp said the cost of developing the casino had risen too much while Guocoland was more circumspect, only saying it decided to pull out after evaluating the government requirements.
Singapore has fixed the price of the 20.6 hectare Marina Bay waterfront site at S$1.2 billion, which was the price recommended by independent valuers, and said it will choose the winning consortium based on the quality of its concept.
Singapore reversed its decades-old ban on casino gambling earlier this year and is offering licenses to build and operate two casino resorts in a bid to shed its straight-laced image and help attract more tourists.
According to analysts, the two casino resorts will probably cost a total of US$5 billion - about US$3 billion for the Marina Bay resort and US$2 billion for the one on Sentosa Island.
All retail applicants of Genting IPO to get shares through scale-back process
Good news for those who put in an application for Genting's initial public offering.
There will be no balloting to decide on who will get an allotment of shares.
Instead, all applicants will be allocated shares through a scale-back process.
The integrated resorts specialist has also decided to more than double the allotment to retail investors to nearly 102 million shares.
Genting will be issuing up to one billion new shares.
This will be made up of 800 million new shares to the public, institutional and other investors in Singapore, 103 million for an over-allotment option and another 97 million to strategic investors.
It raised about S$350 million in gross proceeds from the share issue, which is part of its move to switch its primary listing to Singapore.
Trading of the shares is expected to begin on Monday.
