BUSINESS

Genting Singapore sells 4.8% stake in Echo Entertainment

TAGs: Business, Casino News, Echo Entertainment, Genting Singapore

singapore asia gentingGenting Singapore has announced that it has sold the 4.8% stake it had in Australian casino operator Echo Crown Entertainment Group Ltd for a sum of AUD$158 million, which when converted, is about $165 million.

Genting’s intention to sell the shares has been well publicized – the company wants to rationalize its investment portfolio – and the resorts casino pushed through on those plans when it sold all of its holdings, a figure that has been placed at 39.6 million worth of Echo shares at a price of AUD$3.99 per share.

Earlier this year, Genting Singapore and its Hong Kong counterpart, Genting Hong Kong Ltd., bought 9.9% of Echo Entertainment with the former, according to a regulatory filing it made back in June, reportedly shelling out AUD$144.2 million for its stake in Echo.

But the Singapore unit of the Malaysian gambling group Genting Bhd. hasn’t had the kind of year it was hoping for. Back in late July, the company’s shares dropped by 1.6% to S$1.26 with 30.2 million shares changing hands at that time. That number was significantly lower than the company’s full-day average of 35.2 million shares in the past five sessions.

A few months before that, Genting Singapore reported a steep 33% drop in their first quarter profit, losing S$205.5 million in the process. All this could explain the reasoning behind the company’s move to sell all of its shares in Echo Entertainment only months after it acquired it. The rationale here appears to be an attempt to get its books, including their investment portfolio, straightened out for the latter part of the year.

On the flip side, Genting Hong Kong has made no plans of selling its stake in Echo and as late as last week expressed its continued commitment to its investment in Echo, even going so far as asking Australian regulators permission to raise its stake beyond the 10% maximum share a single shareholder can own as part of Echo’s constitution.

We’re not exactly sure why Genting Singapore didn’t just transfer its shares to its Hong Kong counterpart for a little premium. Then again, the identity of the buyer remains unknown so that could very well have been the case and their just keeping a tight lid on it.

 

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