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Genting Malaysia disposes off equity interest in UK casino for RM185m

Genting Malaysia disposes off equity interest in UK casino for RM185m

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Genting Malaysia's indirect wholly-owned subsidiary Genting UK has disposed of its equity interest in Coastbright, the casino operator of Maxims Club Casino in London. The sell was for a total cash consideration of approximately RM185 million.According to Bursa Malaysia, the proceeds from the disposal are intended to reduce Genting UK group’s borrowings and for other potential investment opportunities. In addition, the disposal will allow Genting UK to streamline its operations while Genting Malaysia is also "expected to gain" from this. This could amount up to approximately RM123 million, based on Genting Malaysia's audited consolidated financial statements for the financial year ended 31 December 2018 and assuming that the disposal had taken place at the beginning of the year.However, the disposal is not expected to have a material effect on the consolidated earnings, net assets and gearing of Genting Malaysia for the financial year ending 31 December 2019. Following the recent Budget 2019, Genting Malaysia said in a Bursa filing that it plans to review its marketing expenditure and cost structure to mitigate the impact of the tax increases indicated in the latest Budget 2019.According to Finance Minister Lim Guan Eng, taxes, fees and levy on the gaming industry have not increased since 2005. As such, the casino license will be increased from RM120 million to RM150 million per annum, while the percentage for casino duties increased up to 35% on nett collection. The amendments will take effect from 1 January 2019. Genting Malaysia said in the filing that it is assessing the full implications of the additional taxes and will take the appropriate next course of action.Recently, Genting Malaysia was embroiled in a lawsuit with Twenty-First Century Fox and The Walt Disney Company. Genting sued Fox for over US$1 billion for abandoning the 2013 contract to build Fox World, a Fox-branded theme park. Fox then filed a US$46.4 million (approximately RM191.7 million) counter-claim against Genting Malaysia for breach of contract and breach of the implied covenant of good faith and fair dealing.

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