KIEN Huat Realty III Ltd, an affiliate of casino operator Genting Bhd, plans to invest US$55 million (RM194 million) to acquire 34.5 million shares in Empire Resort Inc, operator of the Monticello Gaming & Raceway complex outside New York.
On Wednesday, Empire Resort entered into an investment agreement with Kien Huat, under which US$55 million in new equity capital will be invested in the American company in two tranches in exchange for common stock, representing just under 50 per cent of the voting power of the company.
Empire Resort said it issued 6.8 million common shares to Kien Huat, repesenting about 20 per cent of outstanding shares before the transaction, for US$11 million (RM39 million).
Some US$2.6 million (RM9 million) will be used to pay interest on Empire Resort's convertible senior notes due on July 31 2014, according to a statement issued by Empire Resort.
In the second tranche, the statement said Empire Resort plans to issue an additional 27.7 million shares, raising US$44 million (RM155 million).
Upon closing, Empire Resort said Kien Huat will own 34.5 million shares, putting its holdings at just under 50 per cent.
Following the second tranche, Kien Huat will make a US$10 million (RM35 million) credit facility available to Empire Resort to repay any remaining debt due under its US$4.4 million (RM15 million) senior credit facility with Park Avenue Bank of New York.
Under the agreement, Empire Resort said Kien Huat can appoint three directors to the company's board, including a non-executive chairman.
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