NagaCorp boss Chen Lip Keong to fund 50pct of Naga3 cost
Asian casino investor NagaCorp Ltd has confirmed that the firm’s founder and chief executive Chen Lip Keong will provide partial funding for the company’s new extension to NagaWorld casino resort in Cambodia’s capital, Phnom Penh. Naga 3, aimed at expanding the company’s gaming and non-gaming offerings, will have a total cost of around US$3.5 billion, said the promoter in a Sunday filing.
In the latest filing, NagaCorp stated that it had – after consultation with project appraiser and consultant Colliers International (Hong Kong) Ltd – “ascertained that the total development costs of Naga 3 to develop total gross floor area of 544,801 square metres [5.86 million sq feet] are at about US$3.5 billion.” The figure excludes land costs.
The casino operator added that it had already entered into what it termed a “guaranteed maximum sum design and build agreement” – capped at US$3.52 billion – with long-time partner, Chinese-owned contractor CCAG Asia Co Ltd, for the development of Naga3. The completion date mentioned in that deal is 30 September, 2025.
In a filing earlier this month, the firm had said it expected to invest between US$3.8 billion and US$4 billion in Naga3.
The company stated in its latest filing that it had also decided – “given the limitations from external financing, development risk and based on the advice given by its financial advisers”, namely Credit Suisse (Hong Kong) Ltd and Morgan Stanley Asia Ltd – that “50 percent of this development costs shall be funded by internally generated funds and the balance of 50 percent by the controlling shareholder.”
That was a reference to Mr Chen. He has been increasing his stake in the Cambodian casino operator and currently owns 66.10 percent of the company’s shares.
NagaCorp said “key advantages” of such founding strategy included “cash advances nil of any interest costs to the company,” and minority shareholders continuing “to enjoy the high dividend policy of the company”.
In addition, Mr Chen would only be “paid upon completion and handing over of a fully operational Naga 3,” NagaCorp noted in its latest filing. “In the event that the development costs exceed US$3.52 billion, the controlling shareholder will bear and pay all costs overrun,” the document added.
As part of the deal, Mr Chen is to receive a total of 1.14 billion settlement shares in NagaCorp, issued by the company at a price of HKD12.00 per share, representing a premium of 29.0 percent over the stock’s price on Friday. Such price reflects the Mr Chen’s “confidence in the group’s value growth,” NagaCorp stated.
The settlement shares – to cost a total of US$1.76 billion – will increase Mr Chen’s stake in the company to 73.17 percent, NagaCorp stated.
Hong Kong-listed NagaCorp has an exclusive licence to operate casinos in Phnom Penh and its 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 2017.
Naga 1 and Naga 2 combined are now described as the NagaWorld Complex (pictured), and are connected via an underground shopping mall known as NagaCity Walk.
NagaCorp previously stated Naga 3 will be adding a total 4,720 hotel rooms to the NagaWorld Complex, divided by four hotel towers and one 55-storey “condotel” – understood to be a reference to a condominium hotel – as well as a 12-level “multi-entertainment podium”. Naga 3 will be near the existing properties and connected to them via NagaCity Walk, it added referring to a shopping mall developed by the group that is located below street level.
Latest News
Sign up to our FREE Newsletter
(Click here for more)
