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  • Aug 28, 2014
  • Updated: 7:59pm

Star Cruises-Genting venture seeks S$3.38b for resort

PUBLISHED : Wednesday, 20 December, 2006, 12:00am
UPDATED : Wednesday, 20 December, 2006, 12:00am
 

A joint venture between Star Cruises and Genting International will seek at least S$3.38 billion (HK$17 billion) in debt from third parties to finance their planned S$5.2 billion Sentosa Integrated Resort in Singapore, according to a statement.


The two companies, which have a common Malaysian parent in Genting, would commit a maximum of S$1.82 billion in equity financing to the resort in three phases, on December 20, January 3 and January 30 next year, the statement by Hong Kong-listed Star Cruises said.


Of the S$1.82 billion financing, Star Cruises, the world's No3 cruise ship operator, will contribute a maximum of S$455 million, to be financed by its own equity and unutilised credit facilities.


These terms were part of an agreement signed by Star Cruises and Singapore-listed Genting International on December 15 regarding their joint venture, Infinity@TheBay, which will own and operate the Sentosa Integrated Resort.


Shares of Star Cruises rose 3.43 per cent to HK$1.81 yesterday when trading resumed after suspension on Monday.


Star Cruises declined to comment on a Bloomberg report that it had hired three banks - CommerzBank of Germany, Norway's biggest bank Nor ASA and Aseambankers Malaysia - to arrange a US$750 million loan to finance the resort.


The S$5.2 billion cost of the Sentosa Integrated Resort includes a S$605 million land premium which Infinity must pay by March 8. Star Cruises and Genting International intend to contribute their existing shareholders' equity to finance the land premium, according to the announcement.


The resort, on Sentosa Island, is expected to be operational by 2010. It will include a casino, six hotels with 1,830 rooms, shops, restaurants, leisure attractions such as Universal Studio Singapore and a marine life park.


Infinity, which is 25 per cent owned by Star Cruises and 75 per cent owned by Genting International, won the bid for the Sentosa Integrated Resort on December 8, beating competitors including a Melco International Development consortium.


Winning Sentosa would be the only catalyst to boost Star Cruises' share price, a DBS report said on August 16. 'Star Cruises shares will likely languish at current levels until the fourth quarter when we expect optimism to emerge for the joint venture to clinch the Sentosa Integrated Resort.'


Star Cruises' share price has soared 40 per cent since the August 16 report, from HK$1.297 to HK$1.81 yesterday.


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