Resort World Catskills faces bankruptcy

It has been reported that Resorts World Catskills has been forced to consider bankruptcy, following news that it had an operating loss of $36million over the past quarter. As a result, it is said to be struggling to pay off its $1 billion casino debt and is therefore considering filing for bankruptcy.

Into that enters the casino giant Genting Malaysia and its deep=pocketed investment arm Kien Huat Realty. 

At the moment, Genting and Kien Huat are the majority owners of Resorts World and now want to buy Empire Resorts, a publicly-held company which owns the casino Thompson, Sullivan County. 

Genting has considered that it wants to take Resorts Catskills private and to fold it into its existing global network of casinos. It already owns Resorts World New York City racino in Queens. 

The President of Genting Americas, Ed Farrell, told the USA Today that he saw the company as being in a unique position which would all them to assist with the management of Resorts World Catskills.  

“We can bring synergies to both projects and by just operating at a higher scale, we’re going to be able to put the cost structure in a way that Resorts World Catskills can turn to black and we can make money going forward,” he added. 

In the SEC filing that was made on Friday, Empire Resorts said that it had received a binding proposal from Kien Hunt. The proposal would see them acquire all outstanding equity of the company at $9.74 per share. The Monticello-based company was now trading at $8.35 a share on Wednesday.

However, Empire Resorts has yet to say confirm whether or not it well accept the offer but in its SEC filing, it did confirm that it would pursue the voluntary Chapter 11 bankruptcy as a way to negotiate with creditors. 

The company’s financial struggles have continued, with its operating losses hitting $73.5million through to June 20^th.  

In the filing, Empire Resorts stated that they were “currently generating operating loses as the casino revenues have not exceeded the costs related to the casino since its opening in February 2018.” 

In addition, it has also been confirmed that the Malaysian-Chinese casino magnate, K.T. Lim who owns Kien Huat, has repeatedly bailed out Empire Resorts. Over the last few years, as the company struggled, it’s claimed that Kien Huat helped the business find its footing less than a year ago.  

However, whilst the company did see some improvement over the past few years, the casino failed to come close to meeting revenue projections.  

It had predicted that it would make a gaming revenue of $300 million but it is on pace for $200 million. 

As a result of its hardship, it has previously cut 550 slot machines from the gaming floor and a month later it closed its video-terminal facility at Monticello Raceway. The site previously had 1100 machines, but it left harness racing there. 

“Given our continuing negative cash flows from operations, and in order to meet our expected cash needs for the next 12 months and over the longer term, we will be required to obtain additional liquidity sources or possibly restructure our existing debt and other obligations,” Empire Resorts said in its filing. 

There was no comment from Empire Resorts in relation to this deal.