Tuesday, April 17, 2007

Genting's Ground-breaking for Sentosa Project

Genting Bhd's Singapore-listed subsidiary Genting International Plc (GIL) took a step closer to securing the republic's second casino licence yesterday as it held a ground-breaking ceremony for the soon-to-be-built Resorts World at Sentosa.

“There is no issue now,” said Singapore Trade and Industry Minister Lim Hng Kiang when asked about the suitability check by the country's Ministry of Home Affairs (MHA) on the issuance of a casino licence to GIL,

“We are only looking at our jurisdiction – who the partners and shareholders participating in Resorts World in Sentosa are,” Reuters quoted the minister as saying.

Investment analysts said the minister's remark was seen as a signal that the Singapore authorities were positive on the group's recent restructuring on the shareholding structure of the integrated resort (IR) project announced last month.

Earlier, the Singapore authorities were said to be uncomfortable with the involvement of Macau gambling magnate Stanley Ho in the project via his equity interest in Star Cruises Ltd, an associate of Genting Bhd.

Guests standing near a scale model of Resorts World at Sentosa displayed at the ground-breaking ceremony of Genting International's second casino and entertainment resort on Sentosa Island on Monday
This led to Star Cruises withdrawing from the project, effectively excluding Ho from the venture. Meanwhile, GIL pulled out from the partnership with Star Cruises and Ho to build a hotel casino in Macau.

One of the clauses in the development agreement between Genting group and the Singapore authorities states that the IR had to be 50% completed before a casino licence could be issued.

Also, Singapore's MHA will conduct ongoing suitability checks on the relevant parties to ensure that the consortium involved in the IR project met suitability requirements before and after the casino licence is issued.

Genting's share price fell to a low of RM6.40 (adjusted price after a 1:5 share split) early last month on concerns over the likelihood of it failing to secure the casino licence.

After the restructuring, the stock had, however, recouped all its losses, surging to a record RM9.25 last week. It closed at RM8.75 yesterday.

On the construction works for the Sentosa IR project, GIL would be dishing out over RM1bil, or S$508mil, worth of contracts starting this month up to June.

The group has allocated a budget of S$5.2bil for the project, which was awarded in December last year.

At the ground-breaking, GIL group chairman Tan Sri Lim Kok Thay said he did not foresee any overruns in the budget although building material costs had gone up due to Indonesia's ban on the export of sand to Singapore.

“Currently we are still on budget because obviously in the initial tendering for the project, we had allowed for contingencies,” AFP quoted Lim as saying.

Trade and Industry Minister Lim Hng Kiang (second, left) watches the Lion Dance performance together with Genting International Chairman Tan Sri Lim Kok Thay (second, right) at the ground-breaking ceremony of Resorts World at Sentosa here, today. Also present is RWS Chief Executive Officer Tan Hee Teck (left).

The resort, which is set to open in 2010, will be built on 49ha.

Source : STAR
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