Genting Bhd asset sales key despite US$306mln rights issue: CreditSights

Malaysia’s Genting Bhd will in likelihood need to “sell non-core assets” to stave off further credit-rating downgrades, despite a proposed MYR1.25-billion (US$305.8-million) rights issue, says CreditSights. The institution views the rights issuance as positive but thinks it will have only “modest impact” on the group’s credit metrics. The credit research provider highlighted possible disposal of unused land parcels in Miami, in the United States, as a potential source of funds to reduce debt. It also expects Genting Bhd to avoid further debt-funded attempts to acquire shares in subsidiary Genting Malaysia Bhd over the next 12 to 18 months. “We believe non-core asset sales will be the main tool to stave off downgrade risks, notably the unused Miami land parcels,” wrote analysts Jonathan Tan, Jun Jie, and Lakshmanan R in a Monday report. CreditSights said dividend reductions, perpetual securities issuance and earnings improvements – particularly in New York, Singapore and Las Vegas – would be insufficient to offset the pressure from the group’s “heavy capital expenditure pipeline”. Genting Bhd is the parent of Genting Singapore Ltd, which runs the Resorts World Sentosa casino complex in Singapore. Genting Bhd is also the parent of Genting Malaysia Bhd, which runs that country’s only licensed casino complex, Resorts World Genting. Genting Malaysia also operates casinos in the United States, the Bahamas, the United Kingdom, and Egypt. CreditSights said it was “cautiously hopeful” that Genting Bhd could accelerate a sale of the unused Miami land for potentially more than US$1 billion. Genting Bhd had sought to sell four Miami land parcels for approximately US$1.23 billion in 2023, but the transaction did not proceed. S&P Global Ratings said last month that a disposal at a similar valuation could improve the group’s funds from operations-to-debt ratio by between 3 and 4 percentage points. The global casino operator and plantations business announced its proposed rights issue on Friday, with MYR800 million earmarked for debt repayment and approximately MYR429.5 million for working capital. The exercise is expected to be completed in the first quarter of 2027. CreditSights described the fundraising as a welcome shift from Genting’s traditionally “heavier reliance on borrowing,” signalling shareholders’ willingness to share the burden of reducing debt. But it estimated that net leverage would decline by only 0.2 to 0.3 times, to approximately 4.3 times. The institution said the risk of Genting Bhd losing its investment-grade rating at S&P was “slightly narrower but still pertinent,” despite management’s repeated commitment to preserve it. Regarding Genting Malaysia, CreditSights expects the parent to refrain from further debt-funded stake acquisitions for the next 12 to 18 months to preserve its balance sheet and avoid additional leverage and rating pressure. Genting Bhd’s previous takeover offer closed in December 2025 without achieving the 75-percent shareholding threshold needed to trigger delisting. Subsequent purchases lifted its interest to approximately 73.86 percent, as reported by GGRAsia. CreditSights’ latest assessment suggests another debt-funded privatisation effort is unlikely in the near term. Despite the downgrade concerns, the research provider continued to see low refinancing risk for the group’s US$618-million bond maturing in January 2027. It cited available cash and access to bond and loan markets as potential funding sources.