Genting Issues $217M in MTNs to Support Genting Malaysia Takeover

Malaysian conglomerate Genting Berhad recently announced its intention to buy the remaining 50.64% stake in its listed subsidiary Genting Malaysia Bhd for MYR 6.74 billion ($1.6 billion). In an update on November 10, the former company unveiled the issuance of medium-term notes (MTNs) to support the transaction.

The Issuance Will Enable the Acquisition of Genting Malaysia

In its official announcement, Genting Berhad’s board of directors said that Genting RMTN has issued MYR 900 million ($217 million) in nominal value of MTNs under its MTN program. The issue was officially referred to as Tranche 5 and was issued at par. It has a one-year tenure, with an interest rate of 1 Month KLIBOR + 1.80%.

Genting Berhad confirmed that the net proceeds raised by the issuance of the MTNs will help it fund its acquisition of the remaining ordinary shares (excluding treasury shares) in Genting Malaysia Berhad which are not already held by the company.

Genting Berhad added that the issuance of the MTNs was facilitated by Affin Hwang Investment Bank Berhad and AmInvestment Bank Berhad, which served as joint lead managers.

Genting’s shares experienced a slight price increase in the wake of this announcement.

Genting Offered a Price of $0.56 Per Share

For context, Genting’s takeover bid seeks to buy the remainder of Genting Malaysia’s shares at a price of MYR 2.35 ($0.56) per share. At the time of the offer’s announcement, this price represented a 9.8% premium compared to the actual value of the stock.

Back then, Genting hinted that it plans to fund the transaction via MYR 6.3 billion ($1.5 billion) in loans, as well as its existing cash reserves.

Full ownership of Genting Malaysia will provide Genting Berhad with significant financial stability. This is especially important to the company due to its ambitions to pursue growth in the USA.