Bloomberg News

Genting Falls After New York Project Talks Collapse

June 04, 2012

Genting Malaysia Bhd. (GENM) dropped the most in almost four months in Kuala Lumpur trading after talks to build a $4 billion convention center next to its New York City casino fell through.

The stock declined 4.1 percent to close at 3.54 ringgit, its largest fall since Feb. 8. It was today’s second-worst performer on the benchmark FTSE Bursa Malaysia KLCI Index, which fell 1.2 percent. Its parent Genting Bhd. (GENT) dropped 3 percent to 9.70 ringgit, the lowest close since Oct. 11.

Genting Malaysia wanted to build a 3.8 million-square-foot convention center at Aqueduct Racetrack in Queens where it opened Resorts World Casino New York City last year. Negotiations fell through after weeks of discussion, New York Governor Andrew Cuomo said in an interview on the WOR-AM radio station on June 1. This follows a delay in the group’s plan to build a $3 billion hotel and casino in Miami after a Florida House of Representatives committee postponed a vote on a bill to expand casino gambling.

“This news gave Genting Malaysia a double whammy, experiencing failure in two of the group’s expansion plans in the U.S.,” Low Yee Huap, an analyst at Hong Leong Financial Group Bhd. (HLFG), wrote in a report today. He kept his hold rating with a price estimate of 4.10 ringgit.

Conversations with Genting “haven’t worked out,” said Cuomo, who added that he’s now discussing building a similar project with other companies. Genting may still bid on a convention center project in the city, said Stefan Friedman, a Genting spokesman.

Genting operates the only gaming resort on a hilltop in Muslim-majority Malaysia. Unable to open more casinos on home turf, it’s been expanding abroad. The group is already the U.K.’s biggest casino-operator and opened one of two gambling resorts in Singapore (GENS) in 2010.

To contact the reporter on this story: Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net

To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net; Stephanie Wong at swong139@bloomberg.net


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