singapore hotel: Billionaire Lim Wants to Increase Echo Stake, Eyes Japan

Malaysian billionaire Lim Kok Thay

said he wants to raise his stake in Australia’s Echo

Entertainment Group Ltd. (EGP), and invest in Japan and Macau casinos

if licenses become available.

Genting Hong Kong Ltd. (GENHK), one of the Asian gaming companies

Lim controls, has applied to local regulators to increase its

holding in the operator of Sydney’s only casino to above 10

percent and is now waiting for a decision, the executive said in

an interview today in Kuala Lumpur. Echo shares rose the most in

six weeks.

“We are just patiently waiting” for regulators in New

South Wales and Queensland states to make a decision, said Lim,
Malaysia’s third-richest man according to the Bloomberg

Billionaires Index. “My guess is it will go on for a while.”

The Genting group of companies has been expanding abroad,

from the Bahamas to Manila, amid restrictions on gaming back

home in Muslim-majority Malaysia, where it operates the

country’s only casino on a hilltop. Gambling is forbidden for

Muslims in the Southeast Asian nation as it is considered

unethical under Islam.

Genting Malaysia Bhd. (GENM), one of Lim’s five listed companies,

will spend at least 3 billion ringgit ($937 million) over five

years to upgrade the local resort, the 61-year-old Harvard

University-educated businessman told reporters in Kuala Lumpur

today. It will add 1,300 hotel rooms and spend 400 million

ringgit transforming its theme park after signing a licensing

agreement with Fox, he said.

Echo Entertainment rose 2.7 percent in Sydney after earlier

dropping as much 3.6 percent, the stock’s biggest rise since

June 14. Australia’s benchmark SP/ASX 200 index closed 0.1

percent higher.

Macau Casinos

Genting and Echo are Asia’s largest casino companies by

sales that lack exposure to Macau, the world’s biggest gambling

destination. Genting Hong Kong, a cruise ship company controlled

by Lim, assembled a 6.6 percent stake in Brisbane-based Echo

last year soon after billionaire James Packer’s Crown Ltd.

bought 10 percent of the company.

Genting would “love” to operate in Macau “but the door’s

closed,” Lim said. “When it next opens, we would be the first

one knocking on that door and try our luck.”

Crown, which has a stake in Macau’s City of Dreams resort

thanks to a 34 percent share in Melco Crown Entertainment Ltd.,

was allowed to breach the 10 percent cap on its stake in Echo in

May. Packer has since sold Crown’s stake and won approval from

New South Wales state to develop a rival casino at Sydney’s

Barangaroo development site.

Competing Casino

Lim said he hadn’t decided how many Echo shares Genting

would like to own. Genting Hong Kong’s application to the

Australian regulators last October was for a stake of as much as

25 percent. Companies taking more than a 20 percent share of

listed businesses must offer to take over the whole company

under Australian rules.

“We have not formed any views yet, especially now that Mr

Packer has sold his shares for the reason that he is working on

a competing casino,” Lim said. “We would cross that bridge

after we’ve got our license.”

Lim said the Echo investment was done through the Hong Kong

company after Genting Singapore Plc (GENS)’s board said it wasn’t

interested. It was originally seen as a portfolio investment, he

said.

“This is the first time since Crown won the Sydney bid

that Genting has come out and confirmed that they are still

interested in increasing their stake,” Lafitani Sotiriou, a

Melbourne-based analyst at Bell Potter Securities Ltd., said by

phone today.

Fox Films

In Malaysia, the revamped attraction will be Fox (FOX)’s first

fully-fledged movie theme park, Jeffrey Godsick, president of

Twentieth Century Fox Consumer Products, said today. “There is

nothing specific beyond this first project, but this is the

start of a relationship,” he said.

The redeveloped park is slated to reopen in 2016 and will

feature brands from Fox films including the Ice Age, Rio, Alien

and Night at the Museum in a bid to attract more visitors. It

will cover 25 acres and feature more than 25 rides and

attractions, the company said.

“This landmark development is our first response to the

growing demand for theme parks with a cinematic nature,” said

Lim. “We have a global footprint, so there are plenty of

opportunities for future collaboration.”

Japan Gambling

Japan could be Genting’s next casino investment should

Prime Minister Shinzo Abe’s government approve legislation, Lim

said.

“With a new and stronger government in place, I think

their focus would be to drive the Japanese economy,” he said.

“Tourism certainly must be one of the factors that the

government will be looking at.”

Genting Malaysia opened a 750-acre beach front resort on

the Bimini islands in the Bahamas this month as part of its

expansion in the Americas. The new destination comprising

villas, restaurants, a fisherman’s village and gaming

facilities, will be connected to Miami via twice-daily cruise

ship services.

It has opened a casino at the Aqueduct Racetrack in New

York in October and agreed to buy Boyd Gaming Corp (BYD)’s unfinished

Echelon resort in Las Vegas.

In the U.S., the group is waiting to see if Florida will

pass laws allowing Genting to open casino in Miami where it

purchased a downtown building in 2011. In the meantime, the site

will be developed in phases, Lim said.

The billionaire said he wasn’t concerned about a decline in

casino takings in Singapore, where it is one of two gaming

license holders, and planned no significant change in strategy

to recoup its investment.

“I’m certainly not worried,” Lim said. “The economy

around Asia is still pretty upbeat. There are very positive

signs in the U.S. that it’s coming back.

‘‘Europe is a bit slow, but all that growing activity

around the world would certainly benefit Asia.’’

To contact the reporters on this story:

Barry Porter in Kuala Lumpur at

bporter10@bloomberg.net;

Chong Pooi Koon in Kuala Lumpur at

pchong17@bloomberg.net;

David Fickling in Sydney at

dfickling@bloomberg.net

To contact the editor responsible for this story:

Stephanie Wong at

swong139@bloomberg.net

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