Genting Singapore - Request for trading halt - Right Issues??

Genting Singapore (GENS) has requested a trading halt pending for further announcement. Market speculation is that the company will be announcing a rights issue exercise to raise funds, to pare debt (GENS' total debt stood at S$2.4b as at 30 Jun 09), or even perhaps to beef up its war chest for future business expansion in the region. In the short term, we foresee share price weakness for both GENS and parent company Genting Berhad (GENT) should a rights issue materialize at GENS, although downside could be limited by the excitement over the listing of Wynn's and Las Vegas Sand's planned listing of their Macau casinos, as well as a potential early opening of the Resorts World Singapore.

Reuters reports that Casino operator Genting Singapore is planning to raise more than $1 billion through a rights issue, sources familiar with the matter said on Wednesday. "It's a big issue. Over $1 billion," one source with direct knowledge of the deal told Reuters. Genting shares were suspended earlier on Wednesday. Genting Singapore, a unit of Malaysia Genting, is building one of the city-state's two integrated casino resorts and is also the largest casino operator in the United Kingdom.

Genting Singapore (Genting International): Notable recent fund raising exercises

------------------------------------------------------+--------+--------
2005 2007 S$m S$m
------------------------------------------------------+--------+--------
Convertible bonds
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2007: Issuance of S$425m Convertible Bonds due 2012
425.0
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2007: Issuance of S$450m Convertible Bonds due 2012
450.0
------------------------------------------------------+--------+--------

------------------------------------------------------+--------+--------

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Rights issue
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2007:Renounceable rights issue of 3,611,360,700 new ordinary shares on the basis of 3 rights shares for every 5 exisitng ordinary shares, at an issue price of S$0.60
2,166.8
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2005: Rights issue of 2,365,745,405 new ordinary shares on the basis of 5 rights shares for every 3 ordinary shares held at US$0.13/share
511.3
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IPO
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2005: IPO for 800m new shares via placement at S$0.35/share
280.0
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Other sources also told us that it may be on a 1-for-5 basis at a price of S$0.80 (translates to 33% discount).

Market is also saying that the fund raising may be related to 1) cost over-runs at its casino and 2) accumulating cash ahead of the repayment of its S$4.2b syndicated loan in 2011 and S$450m CB due in 2012.

Earlier Genting had raised the budget for its RWS from S$6.0b to S$6.59b, with the increase of S$0.59b funded internally by operating cashflows - we believe the internal funding is possible as we understand that some of the attractions are only slated to be completed in 2011/2012.

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