Cambodian casino operator NagaCorp Ltd on Friday launched a tender offer to purchase some of its outstanding 2024 senior notes from investors, up to a principal amount of US$120 million, or about 22 percent of the total amount outstanding on that issuance, according to a filing with the Hong Kong bourse.
Holders of the 7.95-percent senior notes due to mature in July 2024 are asked to submit tenders to sell, under what the firm termed a “modified Dutch auction procedure”.
The total principal amount outstanding on the senior notes is US$541.7 million. The maximum discount NagaCorp is seeking in return for activating early tender, is 22 percent: i.e., its minimum purchase price is US$880 per US$1,000 of principal amount of the 2024 notes that are validly tendered and accepted.
NagaCorp has a long-life casino monopoly for the Cambodian capital, Phnom Penh, where it runs the NagaWorld complex (pictured in a file photo).
NagaCorp said it intended to finance the offer with cash on hand. The offer is due to expire on November 11. Settlement for the offer will take place on or about November 17.
“The purpose of the offer is to retire a portion of the outstanding 2024 notes prior to maturity, and to enable the offeror [NagaCorp] to manage its overall funding level and to reduce its gross debt and interest costs, while maintaining a prudent approach to liquidity,” NagaCorp stated in the Friday filing.
As of Friday, ChenLipKeong Capital Ltd holds an aggregate principal amount of US$45 million of the 2024 notes. The latter entity is directly and wholly owned by Sakai Private Trust Company Pte Ltd, a family trust established by NagaCorp’s founder and senior chief executive, Chen Lip Keong, for purposes of succession planning.
According to the filing, neither Mr Chen nor his family trust have any intention of tendering any 2024 notes held by the trust.
In August, NagaCorp said it had repurchased a fraction of the 2024 notes on the open market. The company also repurchased part of its 2024 senior notes in September and October.
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