08-01-2009: GIL fulfils obligation in funding casino

PETALING JAYA: Genting International plc (GIL), a subsidiary of Genting Bhd, has forked out S$2 billion (RM4.75 billion), which is the total equity portion, in the funding of the S$6 billion Resorts World at Sentosa (RWS) project in Singapore.

RWS vice-president of communications Krist Boo said that the remaining sum for the project would be drawn down from a syndicated loan which was secured in April last year.

So far GIL has spent S$3 billion on the project, which means there is already a drawdown of some S$1 billion from the syndicated loan.

The 49ha RWS development is funded one-third by equity and two-thirds by borrowings. With the S$2 billion already spent in the project, the Genting group had essentially fully committed the portion of funding using its own equity, she said.

“We poured in our own money first to reflect our confidence in the project,” Boo said at a briefing to The Edge Financial Daily here yesterday.

GIL managed to raise S$2.17 billion in September 2007 from a rights issue that was the largest equity fund raising exercise in Singapore during the year. The money raised is principally for the development of RWS.

Boo said the group was on track to obtain the casino licence, as it had committed half of the project’s total investment.

Under the Singapore government’s request, Genting can apply for the casino licence only when at least half of the committed investment had been expended, at least half of the proposed development area had been completed, and at least half of the proposed gross floor area had been completed.

The group is also required to expend 100% of its committed development investment three years after the casino licence has been issued.

The maximum floor area of the casino allowed by the Singapore government is 15,000 square metres (sq m), which is more than Genting Highland’s casino floor area of some 9,300 sq m, while the maximum number of gaming machines allowed is 2,500.

Asked if the current economic downturn would delay the opening of RWS, Boo said: “We are watching the economy. It is still too early to change our projections.”

Singapore sank deeper into recession after posting a 12.5% contraction in its economy in the fourth quarter (4Q) of 2008 – the third consecutive quarter it saw shrinking gross domestic product.

Boo said RWS was sticking to its targets of hiring 10,000 direct employees and 35,000 indirect workers, as well as attracting 15 million visitors in its first year of full operations, despite the gloomy outlook on Singapore’s economy.

Genting has targeted to open the east and central zones of RWS, including Universal Studios Singapore, four hotels, a casino and the dining and retail outlets, by 1Q2010.

The west zone of RWS, including a marine life park and spa village, would be opened “progressively”, she added, but no decision had been made on the definite deadline.

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