Despite a US$200m bonds offering, Cambodian integrated resort, NagaWorld, has been rated with a negative outlook with the ongoing closure of the facility seeing revenue only hitting 40 per cent of 2019 levels in 2021.
Moody’s Vice President and Senior Credit Officer Jacintha Poh said: “The additional notes will provide the company with sufficient liquidity to fund its cash burn over the next 18 to 24 months should its casino operations remain suspended. The negative outlook reflects our expectation that NagaCorp’s earnings and credit metrics will stay weak in 2021 with the extent and pace of recovery remaining uncertain for now. The company’s revenue in 2021 will be equivalent to around 40 per cent of its 2019 revenue before the coronavirus pandemic, even if the current suspension does not exceed three and a half months as in the previous year. This is because the company’s operating performance in the first quarter of 2020 was not significantly affected by the pandemic.
“Although the pandemic will likely delay NagaCorp’s earnings recovery to 2022, Moody’s expects the company to have sufficient liquidity to withstand its cash burn, which includes operating expenses, interest payments and maintenance capital spending. NagaCorp can also delay planned spending for the construction of an integrated casino and hotel complex in Vladivostok, Russia, and another integrated casino and hotel complex (Naga 3) in Phnom Penh, Cambodia, with no financial penalties.”