PETALING JAYA: Genting Malaysia Bhd
’s (GenM) proposed sale of its Miami landbank is expected to generate net proceeds of RM4.47bil and theoretically increase its 2023 core profit before tax by 20% via lower interest payments, says UOB Kay Hian (UOBKH) Research.
The Miami Herald land consists of four parcels of land measuring 673,691 sq ft and will be sold for US$1.22bil (RM5.43bil) cash to Smart Miami City LLC.
According to UOBKH Research’s report, independent valuer JLL Valuation & Advisory Services LLC had put a market valuation of US$1.22bil (RM5.43bil) on the property.
The deal should see GenM realise a gain on disposal of about US$967mil (RM4.29bil), leaving the group with net proceeds of RM4.47bil or 79 sen per GenM share after the capital gains tax and transaction costs.
The company had acquired most of the land (comprising 15.47 acres) in 2011 for US$246mil (RM1.1bil).
The sale may take up to 60 days to close and the proceeds are likely to be reinvested in its thriving US gaming division, as well as to retire part of the US division’s US$700mil (RM3.12bil) debt.
UOBKH Research has maintained a “buy” call on GenM with a target price of RM4.15 per share, pending the sale completion.
Meanwhile, S&P Global Ratings stated GenM had more funding options for investments with the land sale. It added GenM’s bid for a full casino licence in downstate New York will require an investment cost of at least US$1bil (RM4.45bil).
Note: It has been pointed out to StarBiz that the accurate entity name should be JLL Valuation & Advisory Services LLC and not JLL Property Services (M) Sdn Bhd as reported in an earlier version.
