August 03, 2010

Gentings News Release: NY Racino

This is their release :

We refer to our announcements dated 10 June 2010 and 30 June 2010, wherein we had announced that GENM’s indirect wholly-owned subsidiary, Genting New York LLC (“Genting NY”) had submitted a formal bid to the New York State Division of Lottery (“New York Lottery”) to develop and operate a video lottery facility at the Aqueduct Racetrack in the City of New York, United States of America (“Project”).

On 3 August 2010, New York Lottery announced that its evaluation committee has unanimously recommended to the New York Governor that Genting NY be awarded the New York video lottery licence for the Project. Genting NY’s proposal included US$380 million as an upfront licencing fee.

The recommendation will have to be approved by the New York Governor, the Temporary President of the New York State Senate and the Speaker of the New York State Assembly before the video lottery licence can be awarded.

The video lottery facility at the Aqueduct Racetrack, to be called Resorts World New York, will contain 4,500 electronic slot machines, also known as video lottery terminals. Resorts World New York will also include a grand entrance featuring a three-story atrium with a spectacular water show, enclosed skyway pedestrian bridge linking to the mass transit system of New York , 450-seat two-storey festive casual dining promenade, two high-end restaurants, a sports bar restaurant and lounge and parking facilities for 7,000 cars including a 2,200 car garage.

Genting NY will work closely with the relevant parties, including the operator of the Aqueduct Racetrack, the New York Racing Association and expects to open the preliminary phase of Resorts World New York 6 months after the licence has been awarded.

Why Don't Kien Huat Just Privatise GenM?

The way Lim Kok Thay has been playing footsie with minority shareholders of GenM speaks much of his 'hoity-toity' disregard for their sentiments.

The RM6 billion cash hoard of GenM has been systematically whittled down for his grandoise excesses.

First, he flirted with Walker and then on the home stretch dumped it onto GenM just when the going gets rough. Then,he did a number on the minority shareholders again by selling Oakland and the office block to GenM for cash to take on the savaging ravages of the Sentosa Resort World cost overruns.

Yet again, he gave MGM a huge USD50 million loan through taking their promissory notes. Then there is this NY Aqueduct racino thing where again he fished out USD1 million from the coffers of GenM for the bidding deposit. More funds will be 'whaled out' if the racino project gets going,I am sure.

Then we have this 'daylight robbery' of making GenM the whipping boy to take on loss-making GentingUK.

To date, he has given nothing to minority shareholders. He has also changed the door-gifts for AGM minority shareholders to be vouchers only tenable up in Genting food outlets way,way above sea level.

Over the years, there was no capital return and no special dividends or bonus issues. Year in and year out he hawks the less than 7% dividend less 25% tax.

The frequency and rate he is dipping into the coffers of GenM is mighty suspicious. He is definitely up to no good. There is a precursor here.

So, I think there is all likelihood that he would take GenM private sometime soon. He should as the way he is doing it leaves a 'bad taste in the mouth'

Discipline in School-Why bother at all!


Are teachers really scared of imposing discipline in class even though the cardinal principle of discipline is central to a good teaching and environment in schools?

On the surface, off the cuff,I would say,"No". Every good teacher knows that. Without a measure of discipline in class,you just cannot teach.

So, why is indiscipline a major issue these days?

The most obvious reason is politics.It has crept into the classroom to instill fear into the teachers.Parents do not see two sides of the story. They do not emphatise with the teachers.

They only see their children that 'could do no wrong'. Their negative retaliation are oftentimes unfounded. Then you have the 'golden child' of politicians in class that must be given that arm's length treatment as far as punishment goes. They are the untouchables. A new culture emerges when teachers know that they will get no where disciplining unruly students these days. Apart from the parents, you may get the backlash from students who are wont to vandalise your car or even beat you outside the school compound.

Yes, you can say that again.Gone are the days when children are afraid of telling their parents about the punishment they received in school, for fear of being scolded at home.

A casual talk to retired will give you an insight ointo the more “relaxed” attitude in disciplining students amongst teachers today.

Many years ago, there used to be pin-drop silence in classrooms on report card day. Today, teachers and parents struggle to hear each other over the chaos caused by noisy students.

Teachers don't do much except say, "keep quiet!" and this, too, is usually ignored.There is just no respect for teachers even in class.

I had the rare privilege of attending report card day when my son was at school. Not only was the din created unbearable but also a bunch of students were gambling right under the very nose of the teacher! Imagine that!

Today, potential fears of litigation emanates the air. There will be no such punishment like  standing on the chair.What if the child should fall? What happens if a child starts vomiting after he or she is made to run around the school field as punishment?

Then we have the new gurus who will say that such punishments represents mental torture and lowers the
self-esteem of students in front of their peers.

You hardly hear of students being punished by the pulling of ears or the rapping of hands or knuckles.

During staff meetings, teachers are told not to touch the students. If there is a problem,it should be the principal who handles things. This is the usual advice, especially to new male teachers who may get angry very fast. Students can be corrected verbally "without using harsh word,"


Principles will always caution teachers that proper guidelines should be followed when disciplining students.

The rules may differ from one school to another. Basically, teachers can take action but they must follow the rules. For instance, girls are not to be hit with the rod. Boys who have disciplinary problems should be warned a few times and their parents consulted. If there  are still problems, they can be caned in the headmaster or discipline master's room, but never in public.

All warnings, be it verbal, should be recorded officially.Whenever there are action that needs the police
to intervene,they also asked that step-by-step administrative rulings be conducted first.


Retired teachers say the method of disciplining now is different for a number of reasons.

Firstly,the current system does little to support teachers.

If a teacher takes action against a child who has misbehaved, there is usually someone who files a complaint, resulting in the teacher being demoralised. Discipline has not deteriorated over the years, but interference from outside has increased. That's why some teachers have adopted a tidak apa (don't care) approach.

Teachers are also under a lot of pressure. Most teachers have to move between six classes of 40 students each, that is a total of 240 different minds to handle. Some schools have over 3,000 students. How do you control that?

"There needs to be a separate department to handle registration and disciplinary issues. A teacher's task is to impart knowledge, not to stand at the front gate to catch students who  come late or penalise those who are not wearing name tags."

Some retired principals  are of the opinion that problems in schools have not changed, but the nature of discipline has.

Normal offenses such as stealing, gangsterism, cheating during exams, destroying property,truancy and distribution of porn have been around for decades, but now it's more widespread.

Moreover, these days,students are indisciplined in a more sophisticated way. Their minds and hearts have not changed, but they have become bolder.

There are many factors contributing to this and the problem is "almost irreparable".

The social scenario in schools is evolving. Everything is exam-oriented, sometimes at the  expense of discipline. Many teachers focus their attention on academic results instead of moral values. Often, discipline is left to the disciplinary board when it should be the duty of every teacher.

Parents, media and the Internet are also partly to blame for the rise in school disciplinary problems.

Many parents have neglected teaching their children on the importance of social etiquette.

Children are not taught to respect their elders or property, causing many to be rebellious.

There is also an increasing number of parents who criticise teachers in front of their children. Calling teachers bodoh (stupid) causes children to lose respect for teachers. Many websites and television programmes don't teach good values. As a result, children are more boisterous and answer back."


If this is so, should discipline methods be more "harsh"?

Major Tarlochan Singh,a counsellor, believes that the emotional well-being of a child should always be taken into account.

He believes punishment should be based on the severity of the problem. Caning should only be carried out
 if the child has done something really bad.

Furthermore, parents should be notified based on proof and they must be informed of the type of
 punishment. I believe that punishment should be done in a controlled environment. Done by correct people and in the right setting, the punishment will be accepted by the child and parents."

As we can see, the process of disciplining takes a long time. It has become bureaucratic and fraught with possible litigation,political interference as well as office politics.

It is little wonder why teachers do not want to impose discipline. Why should they?

RM18.8bil Going out of Bursar?

This is an article from the on-line STAR.

It postulates the recent corporate manoeuvres of low-profile billionaire T Ananda Krishnan and his double-barrelled privatisations last week.


Why is he erasing a whopping RM18.8bil in market capitalisation?

Some believe that Ananda has lost confidence in the Malaysian market and/or having a falling out with the powers-that-be which has resulted in him taking his companies of the stock market.[There is a remote possibility here....]

Others espouse the theory that Ananda is “asset stripping”, namely taking out the more valuable and growth driven overseas assets and only keen to bring back to Bursa Malaysia, the unexciting domestic assets.

Observers also recall the move in 2007, when soon after Maxis Bhd’s privatisation and de-listing, Ananda sold a 25% stake in Maxis to Saudi Telecom for US$3bil (RM9.5bil).[He has done this asset stripping before in MAXIS.]

Chances are though, the deals have nothing to do with any loss of confidence. Rather, they are business decisions made primarily in the best long term interest of the major shareholders but done so with the least amount of unfairness to minority shareholders.[Possible but I will take this with two oceans of salt.]

A banker involved in the deal says that the underlying rationale of all the privatisations are that the assets are going into a capital intensive period, whereby capital calls will be the norm and dividends and repayments the exception.[This is the formal reason given as usual.]

All the offer prices of the recent takeovers have come at a decent premium to the last traded market price.

In Tanjong’s case (the only of Ananda’s recent privatisations that the market was not expecting), there is the added conglomerate discount that it suffers from and the fact that since gaming was part of its core business, the stock could not be on the radar of syariah-compliant investors.[Not necessarily vital here.]

It is very likely that Ananda may rope in new investors into some of these privatised assets, possibly even at a higher price than the offer price. That should not be surprising, considering that he did it with Maxis. [Who is talking,now?]

New investors with longer term horizons may be invited in the form of equity or bonds or a combination of both.[Blah,blah and more blah...]

“Malaysia has a deep enough bond market to absorb bonds based on the cash flows of a company like Tanjong,” said an investment banker. [Bunkum!]

“Recall also that the bonds that were issued post the privatisation Powertek Bhd have been well taken up by investors,” noted the banker. Powertek was taken private by Ananda’s vehicle Tanjong Energy Holdings Sdn Bhd in 2003. [ That was in an entirely different political period.]

Still, it is hard to take issue with the offer price for Tanjong shares at RM21.80 apiece, which is higher than even the highest analysts forecast price and at a decent 22% premium to the last traded price.

In Measat’s case though, Ananda does not come out looking as good, considering that the offer price of RM4.20 is not much above the price which Telekom Malaysia Bhd (TM) paid for its 15.39% stake in the satellite service provider in December 2003, following the latter’s listing via a reverse take-over exercise.

TM paid RM4.165 a share, an investment which it had written down over the years and Measat’s shares had failed to perform. [ So, who is shrewd and who got screwed?]

Yet, it is hard to argue with the rationale for Measat’s privatisation – that it needs some serious recapitalisation and restructuring in order for it to expand its satellite network.

Looking forward, analysts expect that Tanjong could come back into the stock market in another form, possibly with only power generation as its core business.

Market talk has it that Ananda could opt to sell off his numbers forecast operations, which is being hit by increasing competition and increased government duties.[I seriously doubt it. He is no Bob Kuok]

There could also be a strategic investor coming into Tanjong’s capital intensive power generation business.
Not to be ruled out also is a reshaped Tanjong plc coming back into the equity market as a pure power play.

Whatever it is, dream away..........

KFC High-gears into Drive-Thru's


KFC is rewarding shareholders in 2010. The shares will be subdivided into 50-sen shares and a one-to-one bonus issue is in the works too.

On top of that it has added a new product line-hot and spicy shrimp.Will this become a hot seller? We await the response from the public.

Meanwhile,KFC has announced it will open at least 20 new outlets in 2011 at a capital outlay of RM45 million.

Of the 20 outlets nationwide, 12 will be under the drive-thru concept.Currently, KFC Holdings has 495 outlets nationwide with 32 drive-thru' outlets.

At least RM3mil is required  for one drive thru outlet. KFC plans to have a minimum of one drive-thru outlet in each state.

For this year, the company has opened 25 outlets to date, out of the planned 40 with a total investment of RM40mil.KFC Holdings also expects a double-digit sales growth for its financial year ending Dec 31, 2010.

In 2009, KFCH recorded a growth of 10.9% with sales of RM2.3bil. Despite uncertainties in the economy last year, KFC  recorded a positive growth and is confident of a  sustainable growth momentum.

KFC Holdings is currently also expanding the sausage capacity at its Port Klang plant to 1,000 tonnes from 500 tonnes currently.

"There is a lot of demand for sausages now and the facility expansion which is ongoing is costing about RM20mil. We hope for it to be completed by early next year," said a KFC spokesman.

On the new Hot & Spicy Shrimp menu, KFC expects to drive its system-wide sales by about 10% during the promotion period from Aug 3 to Sept 30, 2010.

KFC will be spending  over RM2mil on advertising and promotion, inclusive of television and radio commercials, print advertisements, social media such as Facebook.

KFC  hopes that the new menu would be a added choice for customers looking for new options particularly to break fast during the up-coming Ramadan festival.

KFC Holdings recorded revenue of RM600mil for its first quarter ended March 31, 2010, up 14% from the corresponding period last year.

So,is  KFC a good investment when its price goes down to about RM3.00 per share after the split and bonus exercise?

Your guess is as good as mine.

Genting NY: To The Finish?

It's almost home for Genting NewYork as its Aqueduct racino bidder gets state blessings,so it seems.

Official vetters has formally approved Genting NY's bid for the Aqueduct Racino project which offered state $380 million upfront to redevelop the Queens racetrack—$55 million more than any other bidder had offered.

The much-maligned process to select a winning bidder to build and run a slots parlor at Aqueduct Racetrack moved towards the finish line Tuesday when the state Lottery Division's evaluation committee recommended that elected officials approve the Malaysian entertainment giant for the lucrative contract.



The move by Lottery to recommend Genting New York could finally put to an end a nine-year process that has been replete with false starts, political jockeying and investigation. But the group that had been awarded the contract in the previous round, only to have it taken away by Gov. David Paterson amidst a swirl of controversy earlier this year, is likely to appeal a judge's decision late last month that allowed Lottery to choose a new winner, according to Daryl Davis, an attorney for spurned bidder Aqueduct Entertainment Co.

And Mr. Paterson, Assembly Speaker Sheldon Silver and Senate Majority Conference Leader John Sampson all have to give their stamps of approval to the recommendation. The governor has said publicly that he will go along with Lottery's decision.

Genting NY's bid was an impressive bid “on many levels,” according to Lottery officials. Genting offered a $380 million upfront licensing fee, well above the required $300 million and $55 million more than any other bidder had offered. The extra $80 million will help a state budget that has been drowning in red ink.

“Genting's proposal was far superior, in concept, scope, detail and execution, to any we have seen in previous rounds of evaluation,” Lottery Director Gordon Medenica wrote in a letter to Mr. Paterson.

Genting received 95 out of a possible 100 points, scoring high marks for its balance sheet (its publicly traded parent company, Genting Malaysia Berhad, has $1.6 billion in cash on hand and a market capitalization of $5.25 billion), its plan to involve minority- and women-owned businesses, and its marketing plan for the site. The company hopes to target travelers stuck for a few hours at nearby John F. Kennedy Airport to help build its gambling business.

Lottery officials said Genting's hope to open the first phase of the project, encompassing 1,600 of an eventual 4,525 video lottery terminals, within six months might be “overly ambitious,” but company executives insisted they had the experience and resources to meet the proposed timetable.

In a statement, a Genting spokesman said: “We hope the Lottery's recommendation will be endorsed by the legislature so we can immediately get to work creating jobs, preventing layoffs and delivering more than $15 billion in economic benefits to New York over the next 30 years.”

A spokesman for Mr. Sampson said the Majority Conference leader was reviewing the recommendation and that “it's imperative that jobs are created for the local economy as soon as possible.”

A spokeswoman for Mr. Silver said she would review Genting's proposal.

The racino is expected to create about 1,200 construction jobs and 800 permanent ones and bring the state some $500 million a year in revenue.

The Aqueduct project may be smaller than Genting is used to, but it is being looked at as “stepping off point for the United States,” according to a company spokesman. “It will lay the groundwork for a bigger rollout throughout the United States.”

In announcing the Genting recommendation, Lottery denied protests lodged by SL Green and Penn National over their disqualifications. Officials agreed to give debriefings to both companies and promised to respond to SL Green's request for a copy of Genting's complete proposal.

So do you think Genting Malaysia's shares will go up soon and will this be only possible uptick in an ocean of confusion as minority shareholders grapple with the uncertainties of the proposed takeover of Genting UK from GentingS?

I think the jury has yet to sit on this one.