The target date for completion of a sale and purchase agreement – whereby Chen Lip Keong, chief executive and controlling shareholder of Cambodian casino operator NagaCorp Ltd, will sell to the company his entire indirectly held share capital in a firm developing NagaCity Walk – has been put back 18 months.
NagaCorp had announced in an August filing that completion of NagaCity Walk – described as a shopping complex next to the firm’s casino resort NagaWorld (pictured) in the Cambodian capital Phnom Penh – was facing a half-year delay.
The new date for completion of the share sale, and for construction of another scheme known as the TSCLK Complex is now “on or before 31 December 2017”, according to a NagaCorp filing on Tuesday to the Hong Kong Stock Exchange. One of the conditions for the deal to go ahead is the completion of the NagaCity Walk project.
The reason for the push back from an earlier completion date of June 13, 2016, is three “stop work” orders – the most recent on November 5 this year by Cambodia’s Ministry of Land Management, Urban Planning and Construction, said the document.
The filing explained that the stop work orders related to “compliance with local cultural and technical requirements” but added the issues had been “rectified and works recommenced subsequently”.
NagaWorld shares a boundary with the country’s Buddhist Institute. There were media reports from 2014 and this year outlining claims that the NagaCity Walk construction works were interfering with the Buddhist Institute.
Tuesday’s filing by NagaCorp said the seller was spending an extra US$29 million in the construction works of the TSCLK Complex and NagaCity Walk in order, among other issues, to “meet with changes in compliance with local cultural and technical requirements”. It added that cost would not be passed on to NagaCorp.
The TSCLK Complex has been described by NagaCorp as an integrated complex comprising retail, conference and hotel facilities, connected to NagaCity Walk.
No mention was made in Tuesday’s filing of what consideration was involved in the sale to NagaCorp of the NagaCity Walk and the TSCLK Complex interests. A NagaCorp filing of June 13, 2011, relating to deal, had mentioned a total consideration of US$369 million.
The same 2011 filing had said completion in respect to the sale and purchase deal had been due to take place “on or before the fifth anniversary” of that date – i.e. June 13, 2016.
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Professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau