First great news announced...second great news is reversal of impairments. 3rd good news is the Q1 results with profits. 4th good news is the potential bidding of casino and integrated resort in Sarawak.
Genm had total debts of about RM12.1 billion and total cash of RM3.04 billion as of 31 Dec 2022, resulting in a net debt of about RM9.0 billion.
With the disposal of Miami land, Genm will get net disposal proceeds of RM5,433m - RM974m (disposal gain tax) = RM4,459 million.
So Genm net debt will be halved to RM4.6 billion.
Assuming average interest costs of 5%, Genm will be able to save RM220 million of interest expenses and will have almost 4.0 sen per share more for dividend distribution per year.
wont move until tomorrow (one warrant expiring tomorrow at 2.55) and mostly would blocked around 2.90 until it get released by warrants issuers expiring on 12th May. GenM wont fly so fast and still have time to accumulate
Travellers entering Malaysia by car could face wait times of up to three hours during peak periods, said the Immigration and Checkpoints Authority (ICA) on Thursday, advising those travelling by car or bus to take into account a longer wait for immigration clearance.
in genm we trust, may is gonna be the month we watch and smile. Was reading monetary flow from bursa website dated 25th april and found that genm was one of the top outflow by foreign institutional investing firms. With news like this, they will more likely come back.
What else you guys want huh??? PN lose power. GentingM's Miami Land sales. Big dividend coming. EVeryday genting full house. People are eager to lose money to genting. What are you waiting for?
UOB Kay Hian (UOBKH) Research says Genting Malaysia's proposed sale of its Maimi landbank is expected to generate net proceeds of RM4.47bil and theoretically increase its 2023 core profit before tax by 20% via lower interest payments.
The deal should see GenM realise a gain on disposal of about US$967mil (RM4.29bil) leaving the group with net proceeds of RM4.47bil or 79 sen per GenM share after the capital gains tax and transaction costs.
This is broadly inline with my earlier projections, except that UOB said GenM's US division had some US$700mil debt, higher than my figure of US$300mil (which was taken from Maybank research note).
Asuming GenM leaves aside US$500mil for bidding for New York casino licence, it would still have some US$700mil to retire the bulk of its US-dollar loans which were reported to carry an interest rate of 7.7% p.a.
Annual interest expense saving would come to US$700mil x 7.7% = US$53.9mil or RM238mil, which would be about 20% of the projected 2023 earnings of GenM
I think GenM will naturally try to reduce its US-dollar debts which fetch high interest rates, right after it gets the disposal proceeds in next 2 months.
GenM will need US$500 million first as the bidding fee for the New York casino license bidding, and will only spend money to convert its existing facilities at Queens to a full casino after New York bidding committee awards the casino license to GenM sometimes in Q1 2024. Hence, I think it would be natural to use part of the disposal proceeds to first pare down the high-interest US-dollar debts and save interest expenses for the rest of 2023.
Should GenM win a full casino license in Q1 2024, then it can always raise new fund at a more competitive rates as it will have a full casino licence in the bag (which is very valuable) and US Fed is widely expected to start lowering interest rates from end 2023.
@dragon328, the impairment reversal is for below impairment in 2018.
GentingM said on Friday it recorded an impairment loss of RM1. 834bil in relation to the group's total investment (including accrued interest) in the promissory notes issued by the Mashpee Wampanoag tribe.
@AdCool, thanks. I thought of that promissory notes too. I read a Maybank research report in 2020 that there was a chance for these promissory notes to be written back after Joe Biden became the US president, but things have not seemed to move since.
@dragon328, the legal suit finally been settled after multiple rounds of court cases. It finalize in Feb that the land is indeed legal for the tribe to develop though now may have those smaller suits from the surrounding residents opposing the idea of casino and resort development. The main suits on the land validity have been won.
As long as the land validity issue has been legally settled for the tribe, Genm should be able to write back some or all of the earlier impairment. Whether or not Genm and the Mashpee Wampanaog tribe will proceed with developing a casino at the site is not crucial at the moment, the important thing is that the land validity is legalised and so there is value in the land and any building already built at the site.
If written back fully the entire RM1.83 billion impariment provision, Genm will add about 28 sen to its NTA. Who knows if this land has also appreciated in value by 400% in past few years like in the case of its Miami land.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
kl_guy
1,519 posts
Posted by kl_guy > 2023-04-27 10:13 | Report Abuse
25sen dividen will be good .