The Genting Group-A time to Harvest

Genting Singapore has announced that its rights issue of S$1.2 billion announced in August,has been oversubscribed by 135.1%. This augurs well for a company which overran its construction costs of the much touted Resort World Sentosa.

The company sold 1.9 billion rights shares at a ratio of one rights share for every five existing shares. Its parent company, Malaysia-based investment holding and management company Genting Berhad, subscribed in full to its entitlement of 1.04 billion rights shares, which is equivalent to 54.32% of the total number offered.

Of the capital raised, Genting Singapore will use 60% to fund future investments while the remaining 40% will be utilized as working capital. When the rights issue was launched, there was some speculation that the money could be possibly directed towards the company's major Singapore project, Resorts World Sentosa, which has exceeded its earlier budget.

The Genting Singapore rights issue is the third largest to be completed in Singapore this year. It was led by CIMB Group and DBS.

There was another public debt security raised by a subsidiary of Genting Berhad in Malaysia. Genting Berhad could use its drawing rights from this to fund potential acquisitions as well as to use it for operating expenses.

From the market operations, it looks like all’s well that ends well for the Genting Group. It is small wonder that Genting Berhad’s share has topped RM7.50 today and will go beyond after Budget Day 2009. If that be the case, expect Genting Malaysia to also hop on the bandwagon and go places.

I believe capital appreciation is coming the way to the much ‘starved’ shareholders of all Genting shareholders since the share split many years ago. The wait may not be long as Resorts World Sentosa opens its doors to the public before Chinese New year 2010.

I think it is about time that XO bottles can be brought out from the cool wine basement to ring in the good cheer as the year ends in two month’s time.