Mar 28, 2017 Newsdesk Latest News, Rest of Asia, Top of the deck  
The largest shareholder of Cambodian casino firm NagaCorp Ltd, its chief executive Chen Lip Keong, is to gain full control of the company via the exercising of a set of conversion rights regarding a group of convertible bonds.
Once the process is complete, the stake of Mr Chen and related parties in NagaCorp’s entire issued share capital will increase from 39.98 percent to 61.13 percent, the Hong Kong-listed firm stated in a Tuesday filing.
NagaCorp operates NagaWorld (pictured), arguably Cambodia’s best-known casino resort among international commentators and the public. The property, authorised to serve only nationals of foreign countries, is the only legal casino within a 200-kilometre (124-mile) radius of the Southeast Asian nation’s capital, Phnom Penh.
The convertible bonds being exercised relate to a 2011 deal for the acquisition by NagaCorp of TSC Inc, a firm previously controlled by Mr Chen; the sale was only completed last year. TSC is the company holding the rights for the TSCLK Complex, across the road from NagaWorld. “The TSCLK Complex (also known as Naga2) is undergoing fit-out and is expected to be operational in 2017,” NagaCorp said in a February filing.
The conversion of the bonds is subject to the granting to Mr Chen of a waiver by the Hong Kong Securities and Futures Commission regarding the obligation to make a mandatory general offer for all the issued share of NagaCorp not already under his control, the filing said.
According to the Hong Kong Code on Takeovers and Mergers and Share Buy-backs, a mandatory offer is required when “any person holds not less than 30 percent, but not more than 50 percent, of the voting rights of a company and that person acquires additional voting rights and such acquisition has the effect of increasing that person’s holding of voting rights of the company by more than 2 percent from the lowest percentage holding of that person in the 12 month period ending on and inclusive of the date of the relevant acquisition”.
NagaCorp’s Monday filing stated that Mr Chen had indicated to the company that he did not intend for the moment to convert a different group of convertible bonds also under his control. The latter bonds are related to a different deal between Mr Chen and NagaCorp regarding the acquisition by the latter of Citi Walk Inc.
City Walk is the holding company for the NagaCity Walk project. The scheme, an underground shopping complex that had a soft opening in mid-August last year, will connect Naga2 to NagaWorld.
If Mr Chen were also to exercise the conversion rights of the NagaCity Walk convertible bonds, his stake in NagaCorp would increase to 69.83 percent of the firm’s entire issued capital.
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