NagaCorp confirms lay-offs, pay cuts amid IR closure
NagaCorp Ltd, the monopoly casino operator in Phnom Penh, capital of Cambodia, has confirmed in a Monday filing, job lay-offs at the group’s NagaWorld integrated resort (IR), as well as pay cuts, the latter effective since March. The firm said these were “proactive measures” to manage the impact of the Covid-19 pandemic, as the casino resort has been shuttered since early March.
“We launched a rationalisation programme to improve cost efficiency, which will impact some of our employees,” stated the Hong Kong-listed company.
“We believe that these changes and other changes we have made as part of our Covid-19 strategy will help with the quick return to business normality and help deliver continued financial stability over the long term,” it added.
In Monday’s filing, the company said it would provide affected employees “with enhanced termination compensation over and above payments required by the applicable Cambodian laws,” in order to “assist their transition into other career or business interests.”
NagaCorp did not disclose how many employees would be affected by the lay-offs. It stated only that meetings with affected employees were “ongoing”.
“As at the date of this announcement, a majority number of affected employees have signed mutual separation agreements,” it added.
Talks of “potential lay-offs” at NagaWorld (pictured) had been confirmed to GGRAsia by a source in April. At the time, a Cambodian labour group representative told GGRAsia that more than 1,300 jobs could be at risk.
NagaCorp also said it was implementing other measures to “minimise” the group’s cash expenditure. These include: reducing payroll expenses by limiting staff on site, and reducing employee pay since March 2021; scaling back hotel and food and beverage operations; and closing some of the property’s facilities to reduce spending on utilities.
The company said it expected via these measures to reduce its monthly run-rate of operating costs to US$6.6 million, from US$8.6 million. It said additionally that monthly interest expenses should decrease to US$2.3 million, from US$5.8 million, after it repaid on May 21 the group’s senior notes due this year.
“While our business operations remain suspended, we are not generating any revenues,” stated the group. As of April 30, the company had cash and deposits amounting to US$451.7 million, according to the latest filing.
In May, NagaCorp said that its annual general meeting had approved a final dividend for 2020, in the aggregate amount of US$81.7 million, to be paid in July 2021.
“Our liquidity could support more than six months of operating expenditure and interest expenses, with minimal revenue and before giving effect to the net proceeds of the offering of the additional notes,” stated the firm in Monday’s filing.
In the document the company said it was proposing an international offering of additional notes to investors in Asia and Europe. The new notes would be issued on the same terms and conditions as the US$350-million notes issued last year. The offer price is still to be announced.
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