Cambodian casino operator NagaCorp Ltd said on Monday it is working on an international offering of notes to institutional investors in Asia, Europe and the United States. The Hong Kong-listed firm said it plans to issue the notes in order to raise funds “to enhance the quality and appeal” of NagaWorld (pictured), its casino resort in Cambodia’s capital Phnom Penh.
The net proceeds from the proposed notes issue would be used to “promote gaming business growth, particularly in our VIP gaming segment, and refurbish the hotel rooms in Naga 1,” the company said in a filing to the Hong Kong Stock Exchange.
NagaCorp has an exclusive licence to operate casinos in Cambodia’s capital and surroundings. It started operations with the NagaWorld property, now referred to as Naga 1, which opened in December 2006. That property now links to Naga 2, an expansion that opened in November last year.
Naga 1 and Naga 2 combined are now described as the NagaWorld Complex, and are connected via an underground shopping mall known as NagaCity Walk.
In February NagaCorp reported 2017 net profit up 38.6 percent from the previous year. Revenue for the period increased by 79.8 percent.
The company said at the time that the “positive results were mainly attributable to robust business volume growth across all segments, especially from the VIP segment”.
Earlier this month, NagaCorp said its gross gaming revenue for the first quarter this year was nearly threefold that of the prior-year quarter, adding that it may need more mass-market tables in future.
In Monday’s filing, NagaCorp said the terms of the notes, including the aggregate principal amount, the tenor, the offer price and the interest rate, would be determined through a book building exercise. Credit Suisse (Hong Kong) Ltd and Morgan Stanley and Co International Plc were appointed joint global coordinators, bookrunners and lead managers of the proposed notes issue.
The casino firm said it would begin a series of roadshow presentations from Wednesday (May 2) to international investors. But it added: “The completion of the proposed notes issue is subject to market conditions and investors’ interest and therefore may or may not proceed.”
NagaCorp is also in the early stages of building another casino resort in the Primorye Integrated Entertainment Zone near the Pacific port of Vladivostok, in the Russian Far East. It was reported last week the company had begun pile cap work for the scheme, which was “broadly on schedule” for operation by 2019.
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Rate of VIP gross gaming revenue year-on-year growth in the second quarter of 2018 in Macau