Genting Intl Lost Poker Game – Pull Out From Macau Deal

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Mar 03 2007
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As expected, Genting made a wise decision (as if it has other choice) by pulling out from the proposed partnership with Macau gambling tycoon Stanley Ho. Genting International said it would sell its 25 percent share of a Macau joint venture to Star Cruise Ltd (SIN: S21) for HK$58.5 million ($7.5 million), giving Star Cruises a full control with its’ 75% share in the Macau project.

In a latest statement to Singapore Exchange, Genting International (SIN: G13) said it was divesting its stake in a Macau hotel casino to be run by Ho “as soon as practicable” because it was unlikely to meet the deal’s regulatory deadline of March 19.

Earlier, Singapore’s casino regulator said that Genting International and Star Cruises along with their business associates would be subject to “suitability checks” before they would be awarded a casino license in the first salvo in punishing Genting for forming a partnership with Stanley Ho secretly without consulting Singapore authorities.

Genting’s Macau investment is part of a deal announced in January that gave a group of investors including Ho a 5.99 percent stake in Star Cruises, which has a 25 percent stake in the Singapore project.
Genting Group should knows from the beginning its’ cards are such that it has to comply with the Singapore authorities since the government hold the five cards of a “Royal Flush” while Genting only managed to secure a “Straight Flush”. Stanley has to call it quit since he only managed a “Full House”. Logically one has to follows where the potential of making money is the highest – in this case Singapore, where the casino business is open for the first time in the history of the nation.

However the story might just begun as it is yet to be seen if the Singapore authorities are satisfy with Genting’s latest arrangement. Singapore might be able to smile at junior Lim only if both Genting International and Star Cruises hand-off from any Stanley-Macau deal as Stanley might still be entering Singapore project via its’ 5.99 percent stake in Star Cruises. But if Stanley is not allowed any stake then there’s no reason why Star Cruises will be allowed into Macau, which will translate the whole scenario back to square one. Genting stock price should be revised down minus it’s valuation of Macau’s project.

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