Tuesday, June 15, 2010

Genting eyes bigger US presence

(BusinessTimes)'Genting Malaysia is aggressively searching for opportunities to invest in the US casino gaming market,' Justin Leong, head of strategic investments and corporate affairs at group parent Genting Bhd, said in an interview in New York. 'Our strategy is building a US presence.'

Armed with US$1.7 billion in cash and being debt free, Genting Malaysia is seeking acquisitions, new markets and potentially a strategic partnership in the US, he said.

The Kuala Lumpur- based company, which said this month that it may bid to develop a slots casino at Aqueduct Racetrack in New York City, first invested in the US sector last year, buying MGM Mirage bonds.

'It's unlikely to be a single asset,' Mr Leong said. 'If we were to acquire something, it's more likely to be a portfolio of assets or a substantial stake in a company.'

Genting Malaysia is also looking at developments and new gambling jurisdictions opening in the US, he said. The company bought MGM Mirage's secured bonds in May 2009 when the Las Vegas Strip's biggest casino owner raised cash to avoid a potential bankruptcy. Genting Malaysia has invested in every capital issue by Las Vegas-based MGM since, said Mr Leong, 32.

'Genting Malaysia's first foray into the US casino market was investing in MGM, and that strategic relationship continues.' The bid for Aqueduct 'is another step'.


Genting Malaysia has been buying stuffs throughout the financial crisis. The risk appetite seems to be getting bigger and bigger. Well, my be I'm wrong, these guys suppose to be expert in gaming industry and knowing what they are doing. Are they stretching themselves too far? One may argue that if they are an active investor then they are over-stretching themselves. It will be OK if they are just a passive investor. Sitting back and collecting money, just like what Warren Buffet did with GE or Goldman Sachs. Unfortunately, I think are taking some active roles - running London, Egypt casinos and now want to be a US lottery operator? Phew! A lots on its plate. Don't forget Genting Singapore that has not delivered what its promises yet. Ah.....I got a headache now, their Star Cruise venture draining the group cash is really hitting me. The risk profile of this company is changing. Its has been a great growth stock for the last 40 plus years but not sure how this company will look like 40 years in the future.

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