* Genting Singapore says rights to strengthen financials
* Says Resorts World on track in terms of costs, timing
* Genting Bhd shares down more than 4 pct at one point
* Analysts concerned about cost overruns at Singapore project
* Genting Bhd may tap Genting Malaysia's cash hoard (Recasts with comments, group details)
By Kevin Lim and Saeed Azhar
SINGAPORE, Sept 9 (Reuters) - Casino operator Genting Singapore (GENS.SI) is raising $1.2 billion in a rights issue for possible acquisitions, leading a bout of fund-raising by casino companies in Asia taking advantage of rising stock markets.
The Singapore firm also said on Wednesday its Resorts World at Sentosa casino development is on track, both in terms of project costs and timing, for a "soft opening" in early 2010, debunking fears of more cost overruns at its massive project in the city-state.
Las Vegas Sands (LVS.N), the world's most valuable casino firm, plans to spin off its Macau operations in a Hong Kong initial public offering to raise as much as $3 billion, while Wynn Resorts (WYNN.O) is expected to list its Macau business in the fourth quarter. [ID:nHKG366971]
"The rights issue will strengthen the company's financials and put us in a strong position to tap strategic opportunities," Genting Singapore Managing Director Justin Tan said in a statement.
But speculation remained strong that the issue was to address cost overruns at the Resorts World at Sentosa casino that it is building in the city-state, as AmResearch said in a research note issued before the company formally announced the issue.
Analysts also said the Singapore unit's fund-raising may result in parent company Genting Bhd GENT.MY tapping 4 billion ringgit ($1.14 billion) in cash held by Genting Malaysia (GENM.KL), which operates the group's lucrative casino business in the Muslim country.
"The rights issue is not necessarily a negative thing. Since the project started, there have been cost overruns," Abdul Jalil Rasheed, equities chief at Aberdeen Asset Management's Malaysia unit, told Reuters in Kuala Lumpur.
Genting Bhd has only about 350 million ringgit in cash and will need to raise debt through banks or get an inter-company loan from Genting Malaysia, he added.
Genting Singapore's cash call "could be a catalyst for Genting Bhd to accelerate the sale of its noncore assets or push Genting Malaysia to pay out its 4 billion ringgit cash hoard," JPMorgan said in a note to clients.
Genting shares in Singapore were suspended earlier on Wednesday, while shares in its parent, the Kuala Lumpur-listed Genting Bhd, ended 4.2 percent lower compared with a 0.47 percent fall in the main index .KLSE, as investors reacted to the cash call.
Shares of Genting Malaysia closed 1.4 percent lower.
Genting Singapore will offer shareholders one rights share for every five held at S$0.80 per rights share, or at a 33 percent discount to the stock's last traded price. The issue will raise S$1.63 billion ($1.15 billion).
Genting Bhd has agreed to subscribe for its 54 percent entitlement of the rights issue.
Genting Singapore is building one of the city-state's two integrated casino resorts, and is also the largest casino operator in the United Kingdom.
Genting's Resorts World at Sentosa casino has been plagued by cost overruns due to the escalating price of steel and other building materials, a problem also faced by Las Vegas Sands which is building the city-state's other casino.
The latest cost estimate is about S$6.6 billion ($4.6 billion), more than the S$5.2 billion price tag cited shortly after the firm won the Singapore bid in December 2006.
Genting Singapore shares have more than doubled this year, and closed at S$1.19 on Tuesday.
The firm has been reporting losses since it listed in Singapore in December 2005, hit by the cost of building the Singapore casino and writedowns related to its purchase of casinos in Britain.
It posted a second-quarter net loss of S$50.7 million.
DBS (DBSM.SI) and CIMB BUCM.KL are the joint lead managers for Genting Singapore's rights issue. They are also lead underwriters for the issue, alongside UBS UBSN.VX, JPMorgan (JPM.N), Deutsche Bank (DBKGn.DE), HSBC (HSBA.L), CLSA and Royal Bank of Scotland (RBS.L). ($1=1.423 Singapore Dollar) (Additional reporting by Julie Goh in Kuala Lumpur; Editing by Dhara Ranasinghe, Valerie Lee and Muralikumar Anantharaman)