GAMING group Genting Bhd says the casino resort it is building in Singapore is on track for a soft opening in the first quarter of next year and that its construction cost is within the increased budget.
"Genting International revised the budget earlier because the project had overrun the initial budget. At this point, it is within the enlarged budget," Genting chairman and chief executive Tan Sri Lim Kok Thay told shareholders during its annual meeting in Kuala Lumpur yesterday.
Genting International, recently renamed Genting Singapore plc, said earlier this year that its investment in the casino resort on Sentosa Island was expected to increase to S$6.6 billion from S$6 billion (RM16 billion from RM14.5 billion).
"The cost has increased because we have added and changed some specifications so that we will end up with a much, much better project from the original," Lim said.
He added that the project, which boasts of a Universal Studio theme park, Hard Rock Hotel and the world's biggest oceanarium, will open in stages, starting with the casino.
"This is a large project. It is not prudent to launch all at one go although that's the ideal. The plan is to open the gaming part first to get cash flow intact," Lim said.
Genting Singapore is a 54.4 per cent-owned subsidiary of the group.
Lim quelled speculation that Genting was eyeing an ultimate investment in Macau through the recent purchase of a 3.2 per cent stake in MGM Mirage and US$100 million (RM353 million) of its bonds.
MGM Mirage, a major casino operator on the Las Vegas strip, is part of a joint venture in Macau.
"We are treating it as an investment at the moment, to maximise returns on cash rather than keeping it in deposits. The plan is no more than that," he said.
"The bond is secured against two top quality assets and, if repayments failed, we can collect the collateral. The management recognises that this is a good investment.
"As we get to know MGM better, we hope we can strike out some marketing alliances."
Lim also said that despite the recession in the UK, the group expects its investments there "to turn in profits at the same time as projected when it made the acquisitions".
The group acquired control of Stanley Leisure, the UK's largest casino operator, in October 2006.
"The business has got a lot of potential," Lim said. Already a major player in the UK, the unit can later expand to Europe, which is a "greenfield for gaming".
"It will be good to get the timing right for investment, but no one has predicted this round of financial crisis."
On another development, Lim said that Genting was just a "minor player" in Rank Group, the UK's bingo hall operator in which Tan Sri Quek Leng Chan's Guoco has reportedly built up a 24.1 per cent stake as of last October.
Genting owns about 11 per cent of Rank, according to media reports.
By Business Times (by Chong Pooi Koon)
Posts
No comments:
Post a Comment