Genting steps up share purchases as the price nears a two-decade low

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Genting steps up share purchases

Highlights

Genting insiders increased purchases as Kien Huat Realty bought 422,500 shares at RM1.4940–RM1.3919, raising Lim's stake to 1.74 billion shares.
Genting shares have declined 22.9% since the rights issue announcement, closing unchanged at RM1.45 on Friday with RM5.6 billion market capitalization.
Rights issue aimed to raise RM1.25 billion, with RM800 million allocated for debt repayment and shares offered at 25–30% discount to theoretical ex-rights price.

This article was translated from the original. Read the original version by our correspondent here.

Insider purchases follow share price pressure

According to The Edge Malaysia, as reported in the group's stock exchange filings, Kien Huat Realty Sdn Bhd purchased 422,500 Genting shares on 14 and 15 Oct, bringing Lim's deemed interest to 1.74 billion shares. The latest purchases were made at RM1.4940 and RM1.3919 per share, with a total transaction value of RM596,924.50.

Overall, Lim has added approximately 6.42 million Genting shares as the company's stock continued to be sold down following the announcement of the proposed rights issue. Genting shares have fallen 22.9% since the announcement and closed unchanged at RM1.45 on Friday, giving the group a market capitalisation of RM5.6 billion.

Meanwhile, the group's chief executive officer Datuk Seri Tan Kong Han also bought an additional 150,000 shares. He purchased 50,000 shares at RM1.45 per share on 13 Oct and another 100,000 shares at RM1.42, bringing the total transaction value to RM214,500, on top of the 400,000 shares he bought on 12 Oct worth RM624,000.

Following the purchases, Tan held 2.04 million shares, representing a direct stake of 0.053% in the group. He also retained an indirect interest of 0.003%.

Rights issue focused on debt repayment and financing costs

Of the proposed RM1.25 billion fundraising, Genting has allocated RM800 million to repay borrowings, RM280 million to pay interest and other financing costs, RM149.5 million for general working capital requirements, and RM20.5 million to cover expenses related to implementing the exercise.

The rights issue is being offered at a 25% to 30% discount to Genting's theoretical ex-rights price, based on the company's proposal. The move highlights the group's priority of strengthening its balance sheet, while insider share purchases signal management confidence despite weak market valuations.

In our earlier coverage of Genting's RM1.25 billion rights issue, the group explained that the fund allocation included RM800 million for debt repayment and RM280 million for interest and other financing costs, alongside details of the rationale for the 25%–30% discount on the rights shares. We also explained how the announcement pushed the share price to its lowest level since 2003, while taking into account dilution concerns and the signal of confidence from management's share purchases as prices declined.

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