PETALING JAYA: Resorts World Ltd’s (RWL) plan to sell its entire stake in Genting Hong Kong Ltd (GHK) of 1.43 billion shares is a good move, according to the independent adviser appointed by Genting Malaysia to help its shareholders decide on the deal.

The company is a unit of Genting Malaysia Bhd.

“We are of the opinion that the minimum price and the terms of the proposed 2016 disposal mandate are fair and reasonable,” RHB Investment Bank Bhd said in a letter to Genting Malaysia’s shareholders yesterday.

“In the absence of unforeseen circumstances, the proposed disposal mandate is deemed to be in the best interests of your group and is not detrimental.

“As such, we recommend that you vote in favour of the ordinary resolution pertaining to the proposal to be tabled at the extraordinary general meeting to be convened,” it said.

According to circular to shareholders, the disposal shares would be considered non-core investments of the group and were treated as ‘assets held for sale’ in the company financial statements.

“Further, our group does not have any board seat on GHK in respect of our equity interest.

“Therefore, our directors (save for the interested directors) believe that monetising our non-core stake in GHK is beneficial as it is expected to provide the group with additional balance sheet capacity to pursue investments in the leisure and hospitality industry to grow our business,” it said.

The minimum price of the disposal per share is US$0.29 or RM1.13

For illustrative purposes, assuming that the entire disposal shares are disposed of at the minimum price, the total gross proceeds expected to be raised is about US$415mil or RM1.62bil.

“The proceeds arising from the disposal may be used for investments and/or working capital of our group,” said the circular.

In retrospect, on July 2, 2015, Genting Malaysia obtained a mandate from its non-interested shareholders for RWL to dispose of the entire 1.43 billion of GHK shares.

The 2015 disposal mandate will expire on July 1 this year.

To date, RWL has not disposed of any disposal shares.

The EGM is scheduled to be on June 1.