Genting earmarks RM280 million in rights issue proceeds for financing costs
The amount forms part of a RM429.5 million working capital allocation under the proposed RM1.25 billion fundraising.
Genting Bhd said RM280 million of the proceeds from its proposed rights issue would fund interest payments and other financing costs. The company provided the breakdown in an Oct 14 response to queries from Bursa Malaysia about the RM1.25 billion exercise.
Within the RM429.5 million earmarked for working capital, RM149.5 million would meet general requirements. These include employee costs, professional fees, compliance and regulatory charges, taxes, and operating and administrative expenses. Genting said it may revise the allocations as its business, operational and funding needs change.
The renounceable rights issue, announced on Oct 9, also provides RM800 million for repayment of borrowings and RM20.5 million for costs of the exercise. An illustrative price of RM1.30 for each rights share underpins the proposed fundraising.
Genting estimated that repaying RM800 million in debt could save about RM41.3 million in annual interest. That estimate uses a 5.16% weighted average interest rate for the group’s short-term borrowings at June 30, 2026.
Bursa Malaysia also sought an explanation for the proposed discount of 25% to 30% against the theoretical ex-rights price (TERP). The calculation uses Genting’s five-day volume-weighted average share price before the price-fixing date.
Genting said discussions with its principal adviser considered the fundraising size, market conditions, past share-price performance, liquidity, earlier rights-issue discounts and underwriting appetite. It said the discount was intended to encourage participation by entitled shareholders and improve the likelihood of achieving the targeted proceeds.
