Fitch: Jeju Project to Moderately Diversify Genting Singapore"s Business

(The following statement was released by the rating agency)

SINGAPORE, February 25 (Fitch) Fitch Ratings says that Genting

Singapore Plc’s

(GENS; A-/Stable) proposed joint development of an integrated

resort (IR) at

Jeju in South Korea will moderately diversify its geographic

footprint.

Fitch estimates that the proposed Jeju IR will account for about

10% of GENS’

total assets on a pro forma basis on completion of the project

in 2017-2018 and

will reduce GENS’ single property concentration associated with

Resorts World

Sentosa (RWS) located in Singapore.

GENS plans to develop the Jeju resort at an estimated project

cost of USD2.2bn

(SGD2.79bn) in a joint venture with Landing International

Development Limited

(LIDL), a leading property developer based in Anhui Province,

China. Tourists

are the target market for the new IR, with the casino to be

accessible only to

foreigners. The IR will include hotels, residential apartments

and villas, a

theme park, gaming and other leisure facilities. Fitch views

GENS modeling the

Jeju IR after RWS positively as this would translate into a more

diversified

(gaming, leisure and hospitality revenues) and stable earnings

stream.

As noted in Fitch’s recent outlook report for the Asia-Pacific

gaming industry,

with the trend of greater liberalization of gaming regulations,

casino operators

are looking at a number of new markets to meet the demand.

Large-scale casino

resorts are currently under construction in the Philippines and

Vietnam, and

Paradise Co. announced in October 2013 that it was building a

USD1.7bn casino

resort in Incheon, near Seoul’s international airport, that is

scheduled for

completion in 2017. Fitch believes that the region’s gaming

market has ample

space for additional projects.

This investment will also add geographic diversity to GENS’

parent, Genting

Bhd’s (Genting; A-Stable) operations. Genting has a 52% stake in

GENS and total

assets of MYR50.67bn (approximately USD15.38bn) as of 30

September 2013.

Genting’s gaming, power, plantation and property businesses span

Malaysia (11%

of total assets), Singapore (39.6%), UK, USA and Indonesia.

On 7 February 2014, GENS announced that it has entered into a

conditional

shareholders’ agreement with LIDL, which entails a SGD194.2m

investment in

Landing Jeju Development Company (LJDC), a wholly owned

subsidiary of LIDL. The

SGD194.2m investment comprises SGD97.1m each of equity and

shareholder loans.

LIDL has already invested SGD58.9m in equity in LJDC and is to

invest SGD38.2m

in additional equity and SGD97.1m in shareholder loans. On

completion of these

investments, LJDC will have paid-up capital and shareholder

loans of SGD194.2m

each. GENS and LIDL will each have a 50% stake in LJDC.

In addition, Dynamic Sales Investments Limited, an indirect

wholly owned

subsidiary of GENS, has entered into a conditional subscription

agreement to

acquire 5% of the enlarged issued and paid-up share capital of

LIDL for

SGD39.8m. As of end-December 2013, GENS’ unrestricted cash and

available-for-sale investment portfolio stood at SGD3.63bn and

SGD1.86bn

respectively, which is ample to fund the above-mentioned

investments. Moreover,

GENS continued to be in a net cash position as of 31 December

2013.

While the execution of this project in isolation is unlikely to

impact Genting’s

credit profile, potential projects in Las Vegas, New York City

and Miami in the

US, and possibly Japan, if executed simultaneously, could

stretch its credit

profile. Genting too continued to be in a net cash position as

of 30 September

2013.

In 2013, GENS reported a 3% decline in revenue to SGD2.85bn.

Notwithstanding the

higher volume registered in the gaming business, the lower win

percentage in the

premium gaming business resulted in an 8% decline in 2013 gaming

revenue.

Non-gaming revenue grew by a robust 18% on the back of strong

visitor arrivals.

EBITDA margin continued to be robust at 42.7% in FY13, despite

declining from

46.2% in FY12.

For more information on the outlook for the Asia-Pacific gaming

industry, please

refer to

“2014 Outlook: Asia-Pacific Gaming” dated 16 December 2013 on

www.fitchratings.com.

Contact:

Nandini Vijayaraghavan, CFA

Director

+65 6796 7216

Fitch Ratings Singapore Pte Ltd

6 Temasek Boulevard

#35-05 Suntec Tower Four

Singapore 038986

Shahim Zubair, CFA

Associate Director

+65 67967227

Vicky Melbourne

Senior Director

+61 2 8256 0325

Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234,

Email:

leslie.tan@fitchratings.com.

Additional information is available at www.fitchratings.com.

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Fitch: Jeju Project to Moderately Diversify Genting Singapore"s Business