GGRAsia – NagaCorp US$120-mln placing for NagaWorld add-on

NagaCorp US$120-mln placing for NagaWorld add-on

Sep 01, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck

Cambodian casino firm NagaCorp Ltd has made a placing and subscription agreement to sell 190,000,000 existing placing shares to not less than six parties, it said in a filing to the Hong Kong Stock Exchange on Thursday.

The company said it intended to use the approximately HKD930-million (US$120-million) net proceeds “for the fit-out of the TSCLK Complex, which is expected to be operational around the middle of 2017; and for general corporate purposes”.

The TSCLK Complex was first mentioned by NagaCorp in a June 2011 filing as a development with retail, conference and hotel facilities. It will be connected to NagaCity Walk and the company’s flagship casino resort NagaWorld (pictured) in Cambodia’s capital. Phnom Penh.

NagaCity Walk, a shopping complex linked to NagaWorld, had a soft opening in the week beginning Monday, August 15, confirmed Tim McNally, NagaCorp’s chairman, in comments to GGRAsia on Wednesday.

In May, NagaCorp acquired the Citywalk Group – owner of NagaCity Walk – at a consideration of US$94 million. Citywalk Group was previously held by Chen Lip Keong, NagaCorp’s controlling shareholder.

Asked if there would be an official opening for NagaCity Walk, Mr McNally told GGRAsia: “We’re going to allow more of the facility to open. I’m not sure if we will call it an official launch or a party; but that will probably be later in the fall [autumn].”

He added: “The feedback we are getting from our managers is very favourable, and China Duty Free [a retail partner in the project] is very pleased so far.”

The chairman was also asked about a media report that NagaCorp was being “audited” by the Cambodian government regarding its existing tax liabilities on non-gaming operations.

“We don’t have any comment on taxation matters, but we are very co-operative with the government in all aspects of our business. We are aware they are going to pass a new gaming law in the near future, and we expect Cambodia will remain a tax-competitive jurisdiction,” he said.

In other remarks, Mr McNally noted NagaWorld’s VIP gambling facilities had been “considerably improved” over the previous two years as a result of equity raising exercises. “I think we’ve got a pretty good property,” he stated.

The chairman confirmed that Naga2 – a hotel and gaming space extension to the resort – was likely to be ready in mid-2017.

“We expect the construction phase of Naga2 to be done by the end of this year, beginning of next year. Then we’ll go through a fitting out period. By mid-year 2017, we’re targeting for Naga2 [to be completed],” stated Mr McNally.

Naga2 – which will be connected to NagaWorld by NagaCity Walk – will include more than 1,000 new hotel rooms and luxury suites, up to 300 gaming tables and 500 electronic gaming machines, according to filings made by the company.

Referring to current operations, the chairman said: “We now have 240 tables and 1,600 gaming machines. We certainly have the capacity to add to that. We have no restrictions in terms of the numbers of machines or tables we operate, so we can continue to ‘fill in’ and move in as required.”

He noted: “By the same token we don’t look for the same type of players as Macau. Our table limits will go up to [as far as] a couple of hundred thousand [U.S.] dollars; but we are still a tier down from the really big players.”

Mr McNally added: “We do have some directly managed VIPs… [but] probably 70 percent plus of our rollings [VIP gambling volume] come from the groups we have incentive agreements with. Basically they provide the credit to the players, we don’t.”

NagaCorp’s net profit for the first half of 2016 increased by 24 percent year-on-year, to US$125.2 million. The company reported total revenue of US$288.5 million, up by 10.3 percent from the prior-year period.

(Updated at 4.30pm, Sept 1)