UPDATED
SINGAPORE, Sept 9 — Casino operator Genting Singapore plans to raise more than S$1 billion (RM2.45 billion) through a rights issue to help fund its upcoming casino as well as build a war chest for possible acquisitions, sources said today.
“It's a big issue. Over S$1 billion,” a source with direct knowledge of the deal told Reuters. Genting shares were suspended earlier today.
Genting Singapore, which is about 54 per cent held by Malaysian casino operator Genting Bhd, is building one of the city-state's two integrated casino resorts. It is also the largest casino operator in the United Kingdom.
The rights issue will be underwritten by a group of about eight banks, including UBS, JPMorgan, DBS and Deutsche, the sources said.
Genting's Resorts World at Sentosa casino has been plagued by cost overruns due to the escalating price of steel and other building materials.
The latest cost estimate for the casino is about S$6.59 billion up from the S$5.2 billion price tag cited shortly after the firm won the Singapore bid in December 2006.
Genting Singapore's share price has more than doubled this year. It closed at S$1.19 on Tuesday, up from 45 cents at the end of 2008. In Malaysia, Genting Bhd shares were down 2.8 per cent, underperforming a 0.3 per cent decline in the broad index.
Genting has reported losses since it listed in Singapore in December 2005 due to the cost of building its Singapore casino and writedowns related to its purchase of casinos in Britain.
For the second quarter ended June, the firm reported a net loss of S$50.7 million compared with a loss of S$1.8 million a year ago. — Reuters
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