Genting Malaysia (GENM) has proposed to sell its entire 17.81% stake or 1.43bn  shares  in  Genting  Hong  Kong  Ltd  (GENHK)  for  at  least  RM1.7bn cash.  GENM  said  the  original  cost  of  investment  of  US$604.1m (RM2.15bn), represented an average purchase price of US$0.42 (RM1.50) per  GENHK share.  GENM  said regardless  of the  manner  of  disposal,  the minimum disposal price shall not be less than US$0.33 (RM1.18). (Source: Bursa)

Comments:  We are neutral on this development given that GENM does not recognise  GENHK  as  an  associate,  while  the  dividends  received  thus  far from GENHK is not material. GENM views its stake in GEHK as a non-core asset,  and  is  expected  to  use  the  proceeds  to  partially  fund  its  10-year Genting Integrated Tourism Plan (GITP). We maintain our Neutral rating on GENM with unchanged TP of RM4.30.

Source: Affin Hwang Capital Research - 12 May 2015