Genting Singapore yesterday announced the proposed divestment of its UK casino operations. The company has entered into a conditional sale and purchase agreement in connection with the sale to Genting Worldwide (UK) Limited, an indirect wholly-owned subsidiary of Genting Malaysia Berhad (GEMN), of the entire issued share capital as at completion of each of (i) Genting International Enterprises (Singapore) Pte. Ltd., (ii) Nedby Limited, (iii) Palomino Star Limited, and (iv) Palomino World Limited.

The aggregate sum of the consideration to be received by the Company pursuant to the agreement is £340 million (approx S$688.8 million), to be paid in Singapore dollars. The completion of the Proposed Divestment is conditional upon the approval of the shareholders and the UK Gambling Commission. The purchaser, GENM, was incorporated in Malaysia in 1965 and has been listed on the Main Market of Bursa Malaysia Securities Berhad since 22 December 1989.

The casino operations in the United Kingdom were acquired in 2006 for a total consideration of nearly £627 million when the gaming market there presented potential opportunities offered by the deregulation of the industry. The rationale and benefits to the company of the Proposed Divestment are said to be that the ‘narrow synergies’ between Resorts World Sentosa and the UK’s 44 Genting casinos mean that ‘given the magnitude of the continuing task ahead for RWS, management energy and focus would be better spent on RWS’.

The net proceeds of the Proposed Divestment will be used to enhance RWS marketing and brand development, the Company’s working capital needs and may also be deployed for strategic growth opportunities in the Group’s core businesses in the leisure, hospitality and gaming sectors, when such opportunities arise. However, GENM shares fell over concerns that it is paying too much for the UK gaming business. The acquisition has been described as being expensive in a risky market. (E-07.02.10)

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