Genting Wins $3.3 Billion Integrated Resort Contract
Shares in leisure group Genting International soared on Monday after winning the right to build and run a $3.38 billion casino and resort in Singapore.
Genting International leapt 26.5% at the start of Monday's trading session, while its sister company Star Cruises jumped 23.7%. Both companies are controlled by Malaysia's Genting. On Friday the company won the right to build and run a Singapore casino resort complex with 1,830 hotel rooms, a Universal Studios theme park, the world's largest aquarium and other water attractions.
In an interview with CNBC Asia's "Squawk Box," Lim Kok Thay, Executive Chairman of Genting said, "We were confident we'd answered the question correctly -- which is to address the tourism business in Singapore ... with our strong partners, that's what we've been able to respond to."
On Friday, Singapore Deputy Prime Minister S. Jayakumar told a news conference that Genting provided "the most compelling proposal overall that best meets our economic and tourism objectives." Genting is partnered with Star Cruises and was chosen over two competitors -- Las Vegas-based Eighth Wonder and Kerzner International -- largely based on its ability to attract new and repeat tourism and raise Singapore's profile as a family destination.
This is the second of two big integrated resorts approved by Singapore this year. The first went to a group led by Las Vegas Sands . Both Sand and Genting believe the Singapore resorts will bring gamblers from China, India and Southeast Asia as well as bringing families to visit the theme parks, theater and other entertainment.
However, Genting also expects a good-size chunk of revenue to come from the family attractions. "The nature of the project in Sentosa will definitely attract families. You have four huge attractions there to satisfy everyone in the family." said Mr. Lim.
The Universal Studios theme park to be built on Sentosa at the southern tip of Singapore will be bigger than its sister attraction in Hollywood. Part of the deal with Universal also ensures that no other theme park of this nature will be built in Southeast Asia for the next 30 years. Universal is owned by GE the parent company of CNBC.
Mr. Lim said the casino resort would be funded by Genting and project financing, possibly raising money in the capital markets.
This past May, Las Vegas Sands, the world's biggest casino operator by market value, won a license to build and operate a US$3.22 billion casino resort and convention center in downtown Singapore.