Genting Bhd proposes MYR1.25bn rights issue as Maybank downgrades stock

Genting Bhd has proposed a renounceable rights issue of new ordinary shares to raise approximately MYR1.25 billion (US$306.1 million), according to a filing on Friday with Bursa Malaysia. The group said the subscription price, rights ratio and record date will be determined and announced closer to the implementation period to give the board flexibility.

Maybank Investment Bank Bhd responded with an internal memo on Sunday saying it had decided to downgrade its recommendation on Genting Bhd shares to “sell” and set a new target price of MYR1.49 per unit.

Details of the issue and use of proceeds

Genting Bhd specified the use of proceeds in the announcement: MYR800 million will be used to repay loans within 12 months of the issue; MYR429.5 million will be allocated to working capital in the same period; and MYR20.5 million will cover expenses associated with the rights offer.

The group clarified that final terms — the rights issue subscription price, allotment basis and record date — will be decided by the board “closer to implementation.” That flexibility leaves room for adjustments depending on market developments and the group’s liquidity position.

Why Maybank downgraded Genting and its impact analysis

Maybank analyst Samuel Yin Shao Yang noted in the Sunday note that the bank’s scenario analysis shows “not only minimal interest savings and limited deleveraging” from the potential issue, but also “marked dilution in earnings per share and book value per share.” He added: “We cannot rule out further capital-raising efforts or lower dividends.”

Maybank lowered the recommendation to “sell” and adjusted the target price to MYR1.49 per share, reflecting its view that the transaction, as currently structured, does not deliver meaningful financial relief.

Group debt position and cost of debt

In the Friday filing, Genting Bhd said that as at 30 June the group and its subsidiaries had total borrowings of just over MYR45.25 billion. That total comprises almost MYR9.68 billion in short-term borrowings and almost MYR35.58 billion in long-term borrowings.

The interest rate range on those borrowings is from 3.88% up to 8.45% per annum, according to the company.

Ratings and credit risk

In early September, Fitch Ratings downgraded Genting Bhd, citing that substantial capital expenditure on projects in Singapore and New York had slowed deleveraging efforts. That same month, S&P Global Ratings said Genting Bhd no longer had “buffer” for further earnings disappointments, noting that high spending and weak operating results leave the group at risk of losing its investment-grade rating.

Those agency comments form the backdrop against which the board has decided to open a rights issue: the company combines high leverage with ambitious investment commitments.

Operations, markets and key projects

Genting Bhd is the holding company of Genting Singapore Ltd, operator of the Resorts World Sentosa complex in Singapore. It is also the parent of Genting Malaysia Bhd, which runs Resorts World Genting, the only licensed casino complex in Malaysia. Genting Malaysia also operates casinos in the United States, the Bahamas, the United Kingdom and Egypt.

In its update on the rights issue, Genting Bhd said that in Malaysia regional and domestic tourism will remain under pressure from higher airfares and travel‑related fuel costs, which affect consumers’ travel decisions. The company flagged operational initiatives and performance management to optimise operations and control costs at Resorts World Genting.

In the United Kingdom and Egypt, Genting Malaysia is also focused on improving the customer proposition, operational efficiencies and prudent cost management to support business performance.

The group describes the enhancement and expansion of facilities at Resorts World Sentosa in Singapore as a measure to broaden the resort offering, increase guest engagement and spend, encourage repeat visits and generate greater operating efficiency as assets progressively stabilise.

Genting is also progressing phased development of Resorts World New York City (RWNYC) in the United States, which the company describes as a “profit growth initiative.”

Recent results and financial objective

Genting reported a loss attributable to shareholders of approximately MYR11.6 million for the financial year ended 31 December 2025. In response, management says the group is focused on strengthening its financial position through capital management measures and targeted allocation of financial resources.

The filing adds that the group’s objective is to balance the financing needs of existing operations and committed investments with efforts to reduce existing debt.

What investors and suppliers should watch

For investors and B2B suppliers, the key points are the effective setting of the issue price, shareholder take‑up and the possibility of additional capital rounds if operating conditions deteriorate. Rating agencies have already warned about the group’s narrow buffer; that makes execution of the rights issue and debt-service management decisive in coming quarters.

Financial and capital markets service providers could see activity in placement, underwriting and debt‑structuring work. For operators and technology suppliers in the resorts, the priority will be operational discipline and performance management that Genting proposes for its assets in Malaysia, Singapore, the United Kingdom, Egypt and the United States.

“Not only minimal interest savings and limited deleveraging, but also marked dilution in earnings per share and book value per share,” wrote Samuel Yin Shao Yang of Maybank Investment Bank Bhd.

“For Malaysia, regional and domestic tourism will remain under pressure...,” Genting Bhd said in its update.

For immediate follow-up: the company will publish the rights price, the allotment basis and the record date closer to the implementation period; those announcements will be decisive to gauge the success of the transaction.