(This article was generated by Google Gemini AI from the creator's video)
Ten years ago, Genting could have settled every loan across its group and still retained RM7 billion in cash. Today, the conglomerate's balance sheet has reversed dramatically: even after deploying all of its cash to repay loans, Genting would still owe nearly RM28 billion. The growing debt burden was underscored by a 23% drop in Genting shares in a single day.
Capital-Intensive Overseas Casino Projects
The surge in borrowings comes after Genting spent billions expanding its international casino footprint. For instance, Genting invested around RM20 billion to develop Resorts World Las Vegas. According to The Edge, the property contributed less than RM250 million in EBITDA last year, a relatively small return compared to the initial capital outlay.
Ongoing Commitments and Debt Management
In addition to Las Vegas, Genting businesses have committed billions more to expanding and developing properties in New York and Singapore. Because mega-developments can take years to produce enough earnings to justify their costs, loan servicing costs remain ongoing. Genting's debt had already outpaced cash before the pandemic, recording RM33.1 billion in debt against RM30.9 billion in cash in 2019.
To address its obligations, Genting announced a rights issue aiming to raise RM1.25 billion from shareholders, earmarking RM800 million to repay existing loans. While the group continues to operate profitable assets generating RM8.0 billion in group adjusted EBITDA, questions remain regarding how quickly its newest investments can deliver returns to offset its debt load.
Timothy Tiah (timtiah.newswavcreator@gmail.com) is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
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