Genting CEO buys shares as rights issue pressure weighs on the stock

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Genting CEO buys shares amid pressure

Highlights

Genting CEO Tan Sri Lim Kok Thay bought 400,000 shares at prices ranging from RM1.54 to RM1.58, totalling RM624,000, as the share price fell.
Genting lost more than RM2 billion in market value after announcing a RM1.25 billion rights issue on 9 Oct to reduce debt, triggering concerns over earnings dilution.
CreditSights suggested a potential sale of non-core assets and unused land to reduce debt and avoid credit rating downgrades.

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

Management purchases as share price declines

As reported by The Edge Malaysia, citing filings with Bursa Malaysia, Tan bought 200,000 shares at RM1.58 per share and another 200,000 shares at RM1.54 per share on 12 Oct, bringing the total value of the purchases to RM624,000.

The latest purchases followed his transaction on 29 Sept, when he acquired 200,000 shares at RM1.87 per share. Following these acquisitions, Tan, who is also Genting's president and executive director, directly holds 1.89 million shares, equivalent to a 0.049% interest in the group. He also has an indirect or deemed interest in 100,000 shares, equivalent to 0.003%.

The move came as Genting lost more than RM2 billion in market value on Monday, when its share price fell to RM1.45. On Tuesday, the company's shares remained weak, reaching an intraday high of RM1.50 before declining to an intraday low of RM1.44 and closing at that level, down one sen or 0.69%.

Rights issue and debt burden in market focus

Selling pressure followed Genting's 9 Oct announcement of a RM1.25 billion rights issue to reduce debt. Some analysts warned of earnings and dividend dilution, while others viewed the move as a cheaper funding option as borrowing costs rise and the group faces major commitments in the U.S. and Singapore.

On Tuesday, CreditSights said the group may need to sell non-core assets, particularly unused land, to reduce its debt burden and avoid further credit rating downgrades. Genting shares also remained among the most actively traded stocks on Bursa Malaysia, with around 20.7 million shares changing hands.

In our previous report on Genting Bhd's debt pressure and RM1.25 billion rights issue, we examined how the move aims to reduce reliance on borrowings but is expected to provide only a modest improvement to the group's financial position. We also highlighted that Genting may need to dispose of non-core assets—particularly unused land—to reduce its debt burden and curb the risk of credit rating downgrades, while managing substantial overseas spending commitments.

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