Empire Resorts’ top stockholder wants to take company private

TOWN OF THOMPSON, N.Y.

>> The largest stockholder in Empire Resorts, parent company of the Resorts World Catskills Casino and Monticello Raceway, has offered to buy all outstanding equity of the company that Empire does not own, essentially taking the company private.

In a July 25 letter to an Empire Resorts special committee established to explore strategic alternatives, an official of Malaysian company Kien Huat Realty III Ltd. wrote that Empire is at “a critical juncture.”

Published reports say Empire bled red ink in 2018 despite opening Resorts World in February of that year. The company reported a 2018 loss of $138.7 million and took in 45 percent less gaming revenue at Resorts World than forecast.

Yap Chong Chew wrote on behalf of Kien Huat Realty that “despite cash infusions from lenders and equity holders, the company has operated with significant financial losses year after year, has been unable to become financially self-sustaining from revenues from its operations, and does not appear to have any reasonable prospect for becoming financially self-sustaining in the future.”

Kien Huat currently owns 86 percent of Empire’s common stock.

“In view of the challenges facing the company and our belief that these challenges cannot be overcome while Empire is a public company, Kien Huat would, if requested by the special committee, be willing to

submit a proposal to acquire all of the outstanding equity of the company not owned by Kien Huat,” Chew’s letter read.

Empire Resorts said in a news release on Thursday that its special committee, made up of of independent, disinterested directors, will evaluate the Kien Huat proposal with consultants and “in connection with [the] ongoing review of strategic alternatives.”

Yogonet.com, which covers the gaming industry, says Resorts World employs about 1,600 people.