KUALA LUMPUR (Oct 14): Genting Bhd (KL:GENTING) has earmarked RM280 million from its proposed RM1.25 billion rights issue to pay interest and other financing costs.
The sum will be utilised from the proposed working capital allocation of RM429.5 million, Genting said in its reply to Bursa Malaysia’s queries on the proposed rights issue on Wednesday.
The remaining RM149.5 million would be allocated for general working capital requirements, it said, to cover expenses such as employee-related costs, professional fees, regulatory and compliance charges, tax liabilities and operating and administrative expenses.
The allocation among working capital components may be adjusted over time, according to its operational, business and funding requirements, it added.
Apart from the breakdown of the working capital allocation, Bursa Malaysia had requested additional information on the basis for the proposed 25% to 30% discount to the theoretical ex-rights price (TERP), based on the five-day volume-weighted average price of Genting shares preceding the price-fixing date.
Genting said the discount range was determined after discussions with its principal adviser, taking into account the size of the rights issue, prevailing market conditions, historical share price performance and liquidity, discount levels adopted in previous rights issues and underwriting appetite for remaining open portion of the rights shares.
This also takes into account of the need to provide entitled shareholders with meaningful incentive to subscribe for their right shares and or apply for excess right shares, it added.
The discount is intended to encourage shareholders to subscribe rights shares, reward entitled shareholders for their support, facilitate a higher subscription level and improve certainty of raising the targeted gross proceeds of RM1.25 billion.
The clarification follows Genting’s announcement last Friday (Oct 9) that it plans to raise RM1.25 billion through a renounceable rights issue. It has earmarked the other RM800 million to repay borrowings and RM20.5 million to cover expenses related to the right issue exercise.
Genting said the RM800 million debt repayment could generate potential interest savings of about RM41.3 million annually, based on the group’s weighted average interest rate of 5.16% for short-term borrowings as at June 30, 2026.
The group had total borrowings of RM45.25 billion as at June 30, 2026, comprising RM9.68 billion in short-term borrowings and RM35.58 billion in long-term borrowings. The interest rates on its borrowings ranged from 3.88% to 8.45% per annum.
Genting had cash and cash equivalents of RM17.64 billion as at end-June 30, 2026.
The proposed RM1.25 billion fundraising is based on an illustrative issue price of RM1.30 per rights share.
Genting shares fell two sen or 1.39% to close at RM1.42 on Wednesday — its lowest since April 2003 — as over 29 million shares exchanged hands.
The company has lost about RM1.77 billion or nearly 25% of its market value since announcing its proposed rights issue. At RM1.42, the group is valued at RM5.47 billion.
The stock has more than halved so far this year from RM2.92 at the start of 2026.
In a separate filing, Genting executive chairman Tan Sri Lim Kok Thay acquired six million shares in the group on Oct 12 at RM1.494 per share through his private investment vehicle Kien Huat Realty Sdn Bhd, bringing his deemed interest in Genting to 45.228% or 1.74 billion shares.