Casino operator NagaCorp ups note issue to US$350mln

Jun 26, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck  

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A new note offering proposed on Monday by NagaCorp Ltd, monopoly operator of a casino complex in the Cambodian capital Phnom Penh, is US$50 million more in principal amount than first flagged, the firm said in a Thursday filing.

A Thursday filing to the Hong Kong Stock Exchange said the aggregate principal of the notes would be US$350 million, compared to the US$300 million proposed on Monday.

Gaming at the NagaWorld site has been suspended since April 1 on the orders of the country’s government, as part of national measures to prevent the spread locally of the novel coronavirus responsible for Covid-19 infection.

Standard & Poor’s (S&P) Global Ratings stated on Monday that it expected the new note offering would help NagaCorp improve its liquidity.

The US$350 million in new notes will bear 7.95 percent annual interest and be due in 2024.

Net proceeds of the senior notes, after deduction of fees, commissions and expenses, will amount to approximately US$336.9 million, the firm stated in its update.

It said it would use the proceeds to redeem “some or all” of its outstanding 2021 notes, including any accrued interest, and other necessary payments “on or prior to” their 2021 maturity.

Any money left over would be used for “general corporate purposes of the company and its restricted subsidiaries”.

The firm has a long-life monopoly casino licence – recently extended to the year 2045 – for the area of the Cambodian capital Phnom Penh, where it runs the NagaWorld complex.

The firm said in its Thursday announcement that approval in principle had been received for the listing and quotation of the notes on the securities-trading portion of the Singapore Stock Exchange.

“No listing of the notes has been, or will be, sought in Hong Kong,” added the statement.

The filing confirmed that a special-purpose vehicle wholly owned by Chen Lip Keong, the chief executive of NagaCorp, had subscribed to US$45 million in aggregate principal amount from the new notes. Under Hong Kong bourse rules, the entity concerned is considered a “connected person” in relation to NagaCorp.

The guarantors of the notes are: NagaCorp (HK) Ltd; NagaWorld Ltd; NagaCity Walk Ltd; Naga 2 Land Ltd; and Naga 3 Co Ltd.

The purchase agreement on the notes has been made with: Credit Suisse (Hong Kong) Ltd; UBS AG Hong Kong Branch; and Morgan Stanley & Co International Plc.

Covenants attached to the notes include restricting the ability of NagaCorp and its restricted subsidiaries to: “incur or guarantee additional indebtedness”; sell assets; enter into transactions with shareholders or affiliates; or “effect a consolidation or merger”.

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