Shares in Malaysia’s Genting tumble by most in 28 years

BREAKING: Shares in Malaysia's Genting tumble as much as 17%, the biggest drop in 28 years, after the Lim Kok Thay-controlled group announced plans to raise about $306 million through a rights issue.

Genting shares just cratered 17 percent, the worst day in 28 years.

The Malaysian gaming giant, controlled by billionaire Lim Kok Thay, told the exchange it wants to raise about 306 million dollars through a rights issue, priced at a discount of 25 to 30 percent. Investors heard that and ran for the exits, dumping the stock to 1.56 ringgit, a drop you have to go back to the 1998 Asian crisis to beat.

Why the panic over fresh money? Because of what it's for. The cash goes to repaying borrowings, and those borrowings hit 45.3 billion ringgit by the end of June, on top of a second quarter net loss. Maybank's analyst ran the numbers and found minimal interest savings but real dilution for every shareholder.

So the casino empire is asking its own investors to bail out the balance sheet, and the market just told them exactly what it thinks of the hand they've been dealt.

This is Sara White, reporting for HIT.