KUALA LUMPUR (Nov 11): Hong Kong-listed Genting Hong Kong Ltd (Genting HK) is selling a 50%-stake in its indirect wholly-owned Genting Macau Holdings Ltd for HK$750 million to White Supreme Corp, an investment holding company owned by real estate, leisure and hospitality investor Ao Mio Leong.

The price tag comprises HK$50 million (US$6.41 million) for the stake, and HK$700 million (US$89.74 million) for White Supreme Corp to also take over a shareholder's loan and interest from Genting Hong Kong's wholly-owned subsidiary — Star Cruises Asia Holding Ltd — to Genting Macau, which amounted to no less than HK$800 million as at Nov 10. Ao is also the guarantor of the deal.

Genting Macau and its subsidiaries are principally engaged in the development of hospitality facilities. It is currently developing a hotel alongside Macau’s Nam Van Lake. 

According to Genting HK's stock exchange filing today, Star Cruises Asia inked the sale and purchase agreement for the disposal with the purchaser on Tuesday (Nov 10). The deal also includes put and call options for the remaining 50% stake in Genting Macau.

The troubled cruise ship operator said the disposal is aligned with its objective to sell non-core assets, and that it will reduce its financial burden in meeting future funding requirements in relation to Genting Macau’s business.

The disposal is estimated to result in a loss of about US$159 million, said Genting HK, after taking into account the transaction's net proceeds of about HK$748.48 million (about US$95.96 million), the US$67.8 million consolidated net liability value of Genting Macau as at Sept 30, the loss on assignment of the sale loan, and the impairment of receivables from Genting Macau.

Genting HK noted that this transaction will increase the group’s liquidity, with the proceeds being used for general working capital for the group, and also to fund the group’s cruise-related and other operations.

The group, which has been hit hard by the Covid-19 pandemic, reported a wider net loss of US$742.6 million for the six months ended June 30, 2020, from US$56.5 million a year ago, as it had to cancel many sailings and temporarily suspend almost all its cruise operations since February. Revenue in the period slumped 69% to US$226.23 million from US$729.16 million.

Shares of Genting HK slipped six cents or 17.46% to HK$0.26 today, valuing the company at HK$2.21 billion. The stock has slumped 66% over the past 12 months.