Fitch: Genting's Rating Unaffected by New Projects and Sukuk Issue

Mon Aug 5, 2013 10:05pm EDT

(The following statement was released by the rating agency) SINGAPORE, August 05 (Fitch) Fitch Ratings says that Malaysia-based Genting Berhad's (Genting) rating (A-/Stable) will not be affected by the group's latest projects, proposed debt issue and disposal of assets in China. The proposed upgrade and branding of the theme park into a 20th Century Fox attraction by Genting Malaysia (GENM), a 49% subsidiary of Genting, will not materially impact Genting's cash flows and margins as Resorts World Genting's (RWG) revenues and EBITDA are predominantly from gaming. 20th Century Fox is the owner and licensor of the trademark. Fitch expects GENM to fund the estimated project cost of MYR400m using its available cash resources. The upgraded theme park is expected to start operations by 2016. This and the other asset enhancement initiatives Genting has in the pipeline for RWG will serve to diversify Genting Highlands' customer base and improve overall visitations. The launch by Genting Singapore (GENS), a 52% subsidiary of Genting, of a 550-room business and leisure hotel located at Singapore's Jurong Lake District on a site area of 9,027sqm with a lease period of 99 years, is expected to be fully operational in mid-2015. GENS's management expects the new hotel's performance to be in line with other Resorts World Sentosa (RWS) hotels and the industry. The land acquisition (about SGD238m or USD187m) and hotel construction cost will be funded entirely by GENS's accumulated cash balance (31 March 2013: SGD3.99bn or USD3.14bn). Fitch expects GENS to maintain its net cash position even after implementing this project. Fitch also does not expect a planned issue by Genting Plantations Berhad (GENP), a 54.6% subsidiary of Genting, of a MYR1.5bn (USD463.65m) 15-year Sukuk programme, to result in a significant increase in Genting's financial leverage. The proceeds will be invested mainly in GENP's Indonesian oil palm plantations and Fitch expects the drawdowns under this programme to be in line with the capital expenditure GENP will be incurring in the medium term. The disposal of a Shuzhou power plant by Genting Power China Limited (GPCL), a wholly owned subsidiary of Genting, to Wah Sun Investments Limited (WSIL) for RMB44m (USD7.12m) is unlikely to make significant impact on Genting's ample liquidity. GPCL has a 60% stake in the Suzhou power plant, which was shut down in 2008 in response to the Chinese government's directive to shut down plants of smaller capacity. The disposal proceeds are minimal at less than 1% of Genting's FY12 consolidated revenues. As of 31 March 2013, Genting's consolidated cash and available-for-sale financial assets stood at MYR19.76bn and MYR6.92bn respectively. Contact: Nandini Vijayaraghavan, CFA Director +65 6796 7216 Fitch Ratings Singapore Pte Ltd 6 Temasek Boulevard #35-05 Suntec Tower Four Singapore 038986 Shahim Zubair, CFA Associate Director +65 6796 7227 Vicky Melbourne Senior Director +61 2 8256 0325 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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