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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 |
SCHEDULE
13D
Under the Securities Exchange Act of 1934
(Amendment No. 25)*
Empire Resorts, Inc.
(Name of Issuer)
Common Stock, $.01 Par Value Per Share
(Title of Class of Securities)
292052107
(CUSIP Number)
Steven L. Wilner, Esq. Cleary Gottlieb Steen & Hamilton LLP One
Liberty Plaza 212-225-2000 |
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
July 25, 2019
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 140.13d-1(g), check the following box. ☐
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 292052107
| 1. | Names of Reporting Persons. |
I.R.S. Identification Nos. of above persons (entities only).
Kien Huat Realty III Limited |
| 2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) |
X |
| 3. | SEC Use Only |
| 4. | Source of Funds (See Instructions) | AF |
| 5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ____ |
| 6. | Citizenship or Place of Organization | Isle of Man |
Number of Shares Beneficially Owned by Each Reporting Person With |
7. | Sole Voting Power | 0 |
| 8. | Shared Voting Power | 32,614,606(1) | |
| 9. | Sole Dispositive Power | 0 | |
| 10. | Shared Dispositive Power | 32,614,606(1) |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person | 32,614,606(1) |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) | X |
| 13. | Percent of Class Represented by Amount in Row (11) | 85.57%(2) |
| 14. | Type of Reporting Person (See Instructions) | CO |
1
This includes 28,914,606 shares of common stock, par value $.01 per share (the “Common Stock”), of Empire Resorts, Inc. (the “Issuer”) and 3,700,000 shares of Common Stock into which the Series F Preferred Stock (the “Preferred Stock”) beneficially owned by the reporting person can currently be converted.
2
Calculated on the basis of a total of 34,413,459 shares of Common Stock outstanding as of May 7, 2019, as reported by the Issuer in its Quarterly Report on Form 10-Q filed on May 8, 2019 (the “10-Q”), 2,390 shares of Common Stock into which the Series B Preferred Stock can be converted, and 3,700,000 shares of Common Stock into which the Preferred Stock beneficially owned by the reporting persons can currently be converted.
| 2 |
CUSIP No. 292052107
| 1. | Names of Reporting Persons. |
I.R.S. Identification Nos. of above persons (entities only).
Lim Kok Thay |
| 2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) |
X |
| 3. | SEC Use Only |
| 4. | Source of Funds (See Instructions) | AF |
| 5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) ____ |
| 6. | Citizenship or Place of Organization | Malaysia |
Number of Shares Beneficially Owned by Each Reporting Person With |
7. | Sole Voting Power | 0 |
| 8. | Shared Voting Power | 32,614,606 (3) | |
| 9. | Sole Dispositive Power | 0 | |
| 10. | Shared Dispositive Power | 32,614,606 (3) |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person | 32,614,606 (3) |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) | X |
| 13. | Percent of Class Represented by Amount in Row (11) | 85.57%(4) |
| 14. | Type of Reporting Person (See Instructions) | IN |
3
This includes 28,914,606 shares of the Common Stock and 3,700,000 shares of Common Stock into which the Preferred Stock beneficially owned by the reporting person can currently be converted.
4
Calculated on the basis of a total of 34,413,459 shares of Common Stock outstanding as of May 7, 2019, as reported by the Issuer in the Form 10-Q, 2,390 shares of Common Stock into which the Series B Preferred Stock can be converted, and 3,700,000 shares of Common Stock into which the Preferred Stock beneficially owned by the reporting persons can currently be converted.
| 3 |
This Amendment No. 25 (this “Amendment No. 25") amends and supplements the Schedule 13D filed by Kien Huat Realty III Limited (“Kien Huat”) and Lim Kok Thay (together with Kien Huat, the “Reporting Persons”) with the Securities and Exchange Commission on August 27, 2009, as previously amended (the “Schedule 13D”), relating to the Common Stock of the Issuer. All capitalized terms used in this Amendment No. 25 and not otherwise defined herein have the meanings ascribed to such terms in the Schedule 13D.
Items 4 and 6 are hereby amended and supplemented to add the following:
Item 4. Purpose of Transaction
On July 25, 2019, Kien Huat offered to, if requested by a special committee (the “Special Committee”) of the board of directors of the Issuer (the “Board”), submit a non-binding proposal to the Issuer (the “Proposal Letter”) to acquire all of the outstanding equity of the Company not held by the Reporting Persons. The acquisition contemplated by the Proposal Letter would, among other things, be subject to the approval of (i) holders of a majority of the votes represented by the outstanding shares of Common Stock and Series B Preferred Stock (together with any other capital stock of the Company entitled to vote together with the Common Stock in the election of the Board, “Voting Stock”) other than Voting Stock owned by Kien Huat or its affiliates and executive management and (ii) the Special Committee or another committee of the Board composed solely of disinterested members of the Board who are also independent of Kien Huat and its affiliates.
The Reporting Persons intend to engage in due diligence activities, communications and negotiations with each other and the Special Committee, as well as the Issuer’s management, other stakeholders (including other equityholders, lenders and the Issuer’s contractual and operational counterparties and regulators) and potential sources of liquidity and debt and equity financing, in respect of the terms, conditions and other matters relating to a potential transaction involving the Issuer and its securities, including the transaction described in the Proposal Letter, and a broad range of other strategic, financial and operational matters.
References to and descriptions of the Proposal Letter do not purport to be complete and are qualified in their entirety by reference to the actual Proposal Letter, which is filed as Exhibit 20 and is incorporated herein by reference.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
The disclosure set forth under Item 4 of this Amendment No. 25 is incorporated herein by reference.
| 4 |
SIGNATURES
After reasonable inquiry and to the best of my knowledge, I certify that the information set forth in this statement is true, complete and correct.
Dated: July 25, 2019
| Kien Huat Realty III Limited | |||
| By: | /s/ Yap Chong Chew |
||
| Name: | Yap Chong Chew |
||
| Title: | Authorized Signatory* |
||
Lim Kok Thay |
| By: | /s/ Yap Chong Chew |
||
| Name: | Lim Kok Thay |
||
| By: | Yap Chong Chew** |
||
___________________
* The Letter of Authorization given by Kien Huat Realty III Limited is filed as Exhibit 21 hereto.
** The Letter of Authorization given by Lim Kok Thay is filed as Exhibit 22 hereto.
| 5 |
EXHIBIT INDEX
| Exhibit Index |
Description | |
| Exhibit 1 | Joint Filing Agreement, dated as of August 27, 2009, by and between Lim Kok Thay and Kien Huat Realty III Limited. | |
| Exhibit 2 | Investment Agreement, dated as of August 19, 2009, by and between Empire Resorts, Inc. and Kien Huat Realty III Limited (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Issuer on August 19, 2009). | |
| Exhibit 3 | Stockholder Voting Agreement, dated as of August 19, 2009, by and among Empire Resorts, Inc., Kien Huat Realty III Limited and the stockholders signatory thereto (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Issuer on August 19, 2009). | |
| Exhibit 4 | Registration Rights Agreement, dated as of August 19, 2009, by and between Empire Resorts, Inc. and Kien Huat Realty III Limited (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Issuer on August 19, 2009). | |
| Exhibit 5 | Custody Agreement, dated as of August 19, 2009, by and between Kien Huat Realty III Limited and JPMorgan Chase Bank, National Association, as Custodian (incorporated by reference to Exhibit 5 to Schedule 13D filed on August 27, 2009). | |
| Exhibit 6 | Standby Purchase Agreement dated as of April 12, 2013, by and between Empire Resorts, Inc. and Kien Huat Realty III Ltd. (incorporated by reference to Exhibit 6 to Amendment No. 8 to Schedule 13D filed on April 15, 2013). | |
| Exhibit 7 | Standby Purchase Agreement dated as of January 2, 2015, by and between Empire Resorts, Inc. and Kien Huat Realty III Ltd. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by the Issuer on January 5, 2015). | |
| Exhibit 8 | Standby Purchase Agreement dated as of December 31, 2015, by and between Empire Resorts, Inc. and Kien Huat Realty III Ltd. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by the Issuer on January 4, 2016). | |
| Exhibit 9 | Letter Agreement dated February 17, 2016, by and between Empire Resorts, Inc. and Kien Huat Realty III Ltd. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by the Issuer on February 18, 2016). | |
| Exhibit 10 | Note Exchange Agreement, dated as of December 28, 2017, among Empire Resorts, Inc., Montreign Holding Company, LLC, and Kien Huat Realty III Limited (incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K filed by the Issuer on January 3, 2018). | |
| 6 |
| Exhibit 11 | Amendment to Commitment Agreement, dated as of December 28, 2017, by and between Empire Resorts, Inc., and Kien Huat Realty III Limited (incorporated by reference to Exhibit 99.1 of the Current Report on Form 8-K filed by the Issuer on January 3, 2018). | |
| Exhibit 12 | Amendment to Letter Agreement, dated as of December 28, 2017, by and between Empire Resorts, Inc., and Kien Huat Realty III Limited (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by the Issuer on January 3, 2018). | |
| Exhibit 13 | Commitment Agreement by and between Kien Huat Realty III Limited and Empire Resorts, Inc. as amended and restated by the Amended and Restated Commitment Agreement, dated as of November 9, 2018, by and between Kien Huat Realty III Limited and Empire Resorts, Inc. | |
Exhibit 14 |
Subscription Agreement, dated as of November 13, 2018, by and between Kien Huat Realty III Limited and Empire Resorts, Inc. | |
Exhibit 15 |
Amended and Restated Certificate of Designations for the Series F Convertible Preferred Stock, dated as of November 9, 2018. | |
Exhibit 16 |
Subscription Agreement, dated as of February 20, 2019, by and between Kien Huat Realty III Limited and Empire Resorts, Inc. (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by the Issuer on February 20, 2019). | |
| Exhibit 17 | Amendment, dated May 7, 2019, to the Commitment Agreement by and between Kien Huat Realty III Limited and Empire Resorts, Inc. as amended and restated by the Amended and Restated Commitment Agreement, dated as of November 9, 2018, by and between Kien Huat Realty III Limited and Empire Resorts, Inc. | |
| Exhibit 18 | Subscription Agreement, dated as of May 21, 2019, by and between Kien Huat Realty III Limited and Empire Resorts, Inc. | |
| Exhibit 19 | Subscription Agreement, dated as of June 17, 2019, by and between Kien Huat Realty III Limited and Empire Resorts, Inc. | |
| Exhibit 20 | Proposal, dated as of July 25, 2019, by Kien Huat Realty III Limited to the special committee of the board of directors of Empire Resorts, Inc. | |
| Exhibit 21 | Letter of Authorization, given by Kien Huat Realty III Limited | |
| Exhibit 22 | Letter of Authorization, given by Lim Kok Thay |
| 7 |
Kien Huat Realty III Limited SC 13D/A
Exhibit 20
Kien Huat Realty III Limited
c/o 21st Floor Wisma Genting
Jalan Sultan Ismail
Kuala Lumpur
Malaysia
Special Committee of the Board of Directors
Empire Resorts, Inc.
c/o Monticello Casino and Raceway
204 State Route 17B, P.O. Box 5013
Monticello, NY 12701
July 25, 2019
Members of the Special Committee:
Empire Resorts, Inc. (the “Company” or “Empire”) is at a critical juncture. Despite repeated 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. The Company’s recent announcement on June 20, 2019 that it has created a special committee to oversee the evaluation of strategic alternatives for the Company as a whole was likely in recognition of this reality.
As you know, Kien Huat Realty III Limited (“Kien Huat” or “we”) is the largest stockholder in the Company, owning approximately 86% of the Company’s outstanding common stock, par value $0.01 per share (the “Common Stock”), including Common Stock issuable upon conversion of the Series F Convertible Preferred Stock, par value $0.01 (the “Series F Preferred Stock”). Kien Huat’s repeated infusions of equity and debt investments in the Company over the years have enabled the Company to continue operating until now. Kien Huat’s commitment to provide further equity financing to the Company pursuant to the Commitment Agreement by and between Kien Huat and the Company, dated as of November 9, 2018, as further amended on May 7, 2019 (the “Commitment Agreement”) will expire on April 15, 2020 and Kien Huat’s final equity investment may occur as early as November 15, 2019. As we no longer believe that the Company can become financially self-sustaining as a standalone public company, at this time, we do not intend to provide further equity or debt financing beyond our obligations under the Commitment Agreement while Empire remains a public company.
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 (the “Proposal”) to acquire all of the outstanding equity of the Company not owned by Kien Huat. We intend to immediately enter into discussions with potential equity and debt financing sources.
We believe that the Proposal would provide the Company’s minority stockholders an opportunity to preserve and recognize value and liquidity that is unavailable to them in the thinly traded market for the Company’s equity and that is unlikely to be available to them in the future if the Company continues as a public company.
The Proposal would assume: (a) 34,413,459 shares of Common Stock outstanding, of which 28,914,606 shares are owned by Kien Huat; (b) 44,528 shares of Series B Preferred Stock outstanding; (c) 740 shares of Series F Preferred Stock, all of which are owned by Kien Huat; (d) outstanding warrants to purchase (i) 60,000 shares of Common Stock at an exercise price of $81.50 per share and (ii) 133,334 shares of Common Stock at an exercise price of $30 per share (together, the “Warrants”); (e) 443,000 restricted stock units (“RSUs”) outstanding; (f) except for the Common Stock, the Series B Preferred Stock, Series F Preferred Stock, RSUs and the Warrants (which we expect would be cancelled upon consummation of the acquisition), no other equity securities or rights to acquire equity securities of the Company are outstanding; and (g) that the Company’s total indebtedness is less than $559,899,000.
Consistent with the letter agreement between Kien Huat and the Company, dated February 17, 2016, which was amended on December 28, 2017, the acquisition contemplated by the Proposal would be subject to the approval of (i) holders of a majority of the votes represented by the outstanding shares of Common Stock and Series B Preferred Stock (together with any other capital stock of the Company entitled to vote together with the Common Stock in the election of the board of directors of the Company, “Voting Stock”) other than Voting Stock owned by Kien Huat or its affiliates and executive management and (ii) the Special Committee or another committee of the board of directors of the Company (the “Board”) composed solely of disinterested members of the Board who are also independent of Kien Huat and its affiliates.
The acquisition contemplated by the Proposal would also be subject to, among other things: (a) the completion of due diligence, including financial, legal, accounting, tax and business and operations diligence, with results satisfactory to us in our sole discretion; (b) our reaching agreement with equity or debt financing sources; (c) the negotiation and execution of mutually acceptable definitive transaction documentation; (d) successfully obtaining all required or advisable regulatory approvals including, without limitation, any required approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the New York State Gaming Commission; (e) satisfaction of any other applicable regulatory or stock exchange requirements and (f) such other terms and conditions as are usual and customary in comparable transactions.
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. To that end, we are prepared to immediately dedicate substantial internal and external resources to allow us to complete diligence on an accelerated time frame and we expect that the Company will assist with such diligence on an expedited basis.
This letter and the Proposal are non-binding, do not constitute an offer capable of acceptance or other binding commitment or obligation and we may terminate discussions regarding the Proposal, the acquisition or any other transaction at any time and for any or no reason. No commitment, including any obligation to negotiate, shall arise with respect to the Proposal, the acquisition or any other transaction unless and until such time as definitive agreements with respect to any such Proposal, the acquisition or other transaction are executed and delivered by the parties thereto, and then only to the extent set forth in such definitive agreements.
Due to Kien Huat’s obligations under the federal securities laws, we intend to promptly file an amendment to its Schedule 13D, including a copy of this letter, with the Securities and Exchange Commission.
We stand ready to immediately commence due diligence and begin discussions and negotiations relating to the Proposal. If you have any questions, please do not hesitate to contact us. We look forward to working together on this transaction.
| Best regards, | ||
| KIEN HUAT REALTY III LIMITED | ||
| /s/ Yap Chong Chew | ||
| Name: Yap Chong Chew | ||
| Title: Authorized Signatory | ||
Kien Huat Realty III Limited SC 13D/A
Exhibit 21
KIEN HUAT REALTY III LIMITED
(Incorporated in the Isle of Man; Company No. 003489V)
Registered Address: First Names House, Victoria Road, Douglas, Isle of Man IM2 4DF
July 25, 2019
To Whom It May Concern
Authorisation To Sign and File Forms
We hereby authorise Mr Yap Chong Chew to sign and file on our behalf any Form 4, Schedule 13D Amendments and any other forms or documents relating to our interest in Empire Resorts Inc which are required to be filed with the United States Securities and Exchange Commission or any other regulatory bodies or authorities in the United States of America.
This authority shall remain valid from the date hereof up to March 31, 2020.
KIEN HUAT REALTY III LIMITED
/s/ Gerard Lim Ewe Keng
GERARD LIM EWE KENG
Director
Kien Huat Realty III Limited SC 13D/A
Exhibit 22
| Lim Kok Thay | |
| 25th Floor, Wisma Genting | |
| Jalan Sultan Ismail | |
| 50250 Kuala Lumpur | |
| Malaysia |
July 25, 2019
To Whom It May Concern
Authorisation To Sign and File Forms
I hereby authorise and designate Mr Gerard Lim Ewe Keng or failing him, Mr Yap Chong Chew to sign and file on my behalf any Form 4, Schedule 13D Amendments and any other forms or documents relating to my interest in Empire Resorts Inc which are required to be filed with the United States Securities and Exchange Commission or any other regulatory bodies or authorities in the United States of America.
This authority shall supercede my earlier authorisation dated March 4, 2019 and shall remain valid from the date hereof up to March 31, 2020.
/s/ Lim Kok Thay
LIM KOK THAY