Operator News
Cambodia – NagaCorp looking to sell notes to investors in Asia and Europe
By Phil - 22 June 2020
Cambodian casino operator NagaCorp is thinking of offering notes to investors to increase its liquidity, but says it has enough cash reserves on hand to last a year and a half on minimal revenue.
The operator said: “The company proposes to conduct an international offering of the Notes to investors in Asia and Europe. In connection with the Proposed Notes Issue, the Company will provide certain qualified investors with recent corporate and financial information regarding the Group. The completion of the Proposed Notes Issue is subject to market conditions and investors’ interest and therefore may or may not proceed. The company has appointed Credit Suisse, Morgan Stanley and UBS as the joint global coordinators, joint bookrunners and joint lead managers in respect of the Proposed Notes Issue.”
NagaCorp owns and operates the only integrated resort, known as the NagaWorld, in Phnom Penh, the capital city of Cambodia.
The company added: “Prior to the temporary suspension of our casino operations, our average monthly expenditures, based on the three months ended 31 March 2020, were US$18.4m. These expenditures included run-rate operating costs of US$13.9m, maintenance capital expenditures of US$1.3m and interest expense of US$3.2m. In addition, the Company incurred monthly gaming obligation and non-gaming obligation payment of US$0.9m. We have undertaken, and expect to continue undertaking a series of actions to minimize our cash expenditures, including scaling back of hotel and food and beverages operations, reducing payroll expenses by limiting staff on site and reducing employee pay since April 2020 and the closure of facilities to reduce utilities expenditure. After giving effect to these initiatives, we expect that our monthly run-rate operating costs will be US$3.9m. As of 31 March 2020 and 31 May 2020, we had cash and deposits of US$464.9m and US$527.1m, respectively. Although we have no other existing facilities to provide further liquidity, we believe that, after giving effect to the application of proceeds of the Proposed Notes Issue as described under “Proposed use of net proceeds”, our liquidity could support approximately 18 months of operating expenditure and interest expenses, with minimal revenue. Our actual level of cash operating expenses in coming periods could be impacted by unanticipated developments of events beyond our control.”
