Genting says committed to Singapore casino
By Sebastian Tong
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SINGAPORE, Feb 28 (Reuters) - Genting International, which in December won a $3.4-billion bid to build a Singapore casino, said it was fully committed to the project and is working closely with the authorities to ensure it qualifies for a licence.
On Tuesday, Singapore's casino regulator said Genting International and Star Cruises -- the two affiliates of Malaysia's Genting Bhd which won the casino bid -- would have to undergo "suitability checks" in order to obtain the casino licence.
The regulator's statement was seen as a warning to Genting that it may not receive a casino licence -- potentially the most lucrative part of the entire resort -- following its unexpected tie-up with Macau gaming tycoon Stanley Ho last month.
"The company, from over 20 years of experience operating casinos in other similar jurisdictions, understands fully the necessity and requirements of thorough suitability checks on casino operators, that this is an ongoing process and will continue even after a licence has been issued," Justin Tan, Genting International's managing director, said in a statement.
Shares of Genting International fell 7.9 percent on Wednesday to close at S$0.76, while Star Cruises fell 12.9 percent in Singapore and 5.7 percent in Hong Kong.
The Malaysian-listed parent Genting Bhd fared little better, falling 8.4 percent to 35.5 ringgit ($10.14).
A sell-down in regional stock markets on Wednesday also maintained pressure on the shares.
Analysts said the Singapore regulator is clearly upset with Genting's tie-up with Ho, which gives the Macau tycoon a minority stake in the Singapore project.
Ho dominated the Macau casino business for four decades, at a time when the former Portuguese colony had a reputation for triad gangs and massage parlours.
On Thursday, Genting is due to sign a development agreement for the second of two gambling planned for the island state and pay the remaining 75 percent of the S$605 million ($397 million) cost of the 49-hectare site.
"It is in Genting's long-term strategic interests to ensure that it fully satisfies any immediate concerns that Singapore gaming regulators may have as it relates to its international business expansion activity," said Jonathan Galaviz of leisure industry consultancy Globalysis.
NO AWARD
U.S. gaming giant Las Vegas Sands , developer of the first of the two planned resorts, has yet to get its casino licence because operators can only apply for the 30-year concession once half of their developments are built.
While Sands has started construction of its downtown, waterfront resort -- due to open in 2009 -- work on Genting's resort, located in Singapore's resort island of Sentosa, has not yet started.
Alex Goh, an analyst at Malaysia's Affin Investment Bank, said he doubted that Singapore would withhold the gaming licence.
"If the Singapore government were to disqualify Genting and re-award it to someone else, they must have a compelling reason for that -- and I don't think this reason is compelling enough. No one has been found guilty of any wrong-doing," he said.
In the deal announced last month, Genting said a group of investors including Ho would take a 6.99 percent stake in its leisure cruise unit Star Cruises, giving the tycoon a tiny effective interest in the Singapore casino.
In exchange, Star Cruises and Singapore-listed Genting International would take a 75-percent stake in a casino hotel in Macau to be operated by Ho.
Genting later said that it would review the structure of the Ho deal after the Singapore authorities asked for clarification.