Genting Berhad Raises $217 Million Through MTNs to Acquire Full Control of Genting Malaysia
Genting Berhad’s Strategic Move to Fully Acquire Genting Malaysia
Malaysian conglomerate Genting Berhad has revealed plans to acquire the remaining 50.64% stake it does not already own in its publicly listed subsidiary, Genting Malaysia Berhad. The acquisition deal is valued at approximately MYR 6.74 billion, equivalent to about $1.6 billion. To support this significant transaction, Genting Berhad has taken a financial step by issuing medium-term notes (MTNs).
Details of the MTN Issuance Supporting the Acquisition
The company’s board of directors announced that through Genting RMTN, it issued MYR 900 million (around $217 million) worth of MTNs as part of its ongoing MTN program. This issuance, labeled as Tranche 5, was carried out at par value and comes with a one-year maturity. The interest rate applied to these notes is set at 1 Month KLIBOR plus 1.80%.
The funds raised from this MTN issuance will be directly used to finance the purchase of the remaining shares in Genting Malaysia Berhad that Genting Berhad does not currently hold. This excludes any treasury shares owned by the company.
Affin Hwang Investment Bank Berhad and AmInvestment Bank Berhad acted as the joint lead managers for this issuance, facilitating the entire process.
Following the announcement of the MTN issue, Genting’s share price saw a modest increase, reflecting market confidence in the acquisition plan.
Offer Price and Financial Strategy Behind the Takeover
The takeover bid from Genting Berhad proposes to purchase the outstanding shares of Genting Malaysia at MYR 2.35 per share, which translates to around $0.56. This offer represented a 9.8% premium over the stock’s market value at the time of the announcement.
To fund the acquisition, Genting Berhad had earlier outlined plans to leverage MYR 6.3 billion ($1.5 billion) in loans combined with its existing cash reserves.
Gaining full ownership of Genting Malaysia is expected to enhance Genting Berhad’s financial stability significantly, an advantage that supports the company’s ambitions for growth, particularly in expanding its operations in the United States market.
