MONTICELLO – The largest stockholder in Empire Resorts, owner of Resorts World Catskills and Monticello Raceway offered on Thursday to acquire all the outstanding equity of the company not owned by it.
In a July 25 letter to an Empire Resorts’ committee established to explore strategic alternatives, an official of Malaysian company Kien Huat Realty III Limited wrote the company is at “a critical juncture.”
Yap Chong Chew, the authorized signatory for Kien Huat, wrote 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 the company’s outstanding common stock and as per agreements will end its equity financing by April 15, 2020, but noted its final equity investment may occur as early November 15, 2019.
“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 wrote that “Given Kien Huat’s history with, and knowledge of the company, we believe we are well positioned to conduct diligence and negotiate and complete the transaction in an expedited manner and expect to promptly enter into an appropriate and customary confidentiality agreement and discussions to do so.”
Empire Resorts, meanwhile, said in a news release on Thursday that its special committee, comprised of independent, disinterested directors will evaluate the proposal along with consultants and “will consider the letter and any response thereto in connection with its ongoing review of strategic alternatives.”
