KUALA LUMPUR (June 22): Founder of Hong Kong-listed NagaCorp Ltd, Tan Sri Chen Lip Keong (pictured), is funding a portion of the casino operator’s proposed new notes to repay its existing US$300 million senior unsecured notes due May 2021 and for general corporate purposes.
Chen, who is executive director and chief executive officer of NagaCorp, has committed to subscribe up to US$45 million in principal amount of the notes, via his wholly-owned company ChenLipKeong Capital Ltd, the company said in an exchange filing today.
This is to “show his support for and confidence in the group”, the filing noted.
NagaCorp said the proposed new notes, offered to “investors in Asia and Europe”, would provide liquidity that could support approximately 18 months of the company’s operating expenditure and interest expenses, with minimal revenue.
The exercise would be determined through a book building exercise by Credit Suisse (Hong Kong) Ltd, Morgan Stanley and Co International plc and UBS AG Hong Kong Branch as joint global coordinators, joint bookrunners and joint lead managers.
“The group intends to use the net proceeds from the notes to redeem some or all of the outstanding 2021 notes on or prior to maturity in 2021, and for general corporate purposes of the company and its restricted subsidiaries, any amounts remain from the redemption of the 2021 notes,” it added.
According to the company, NagaCorp’s outstanding 2021 notes are senior notes issued on May 21, 2018, with an aggregate principal amount of US$300 million and interest at 9.38%.
Separately, S&P Global Ratings today assigned its “B+” long-term issue rating to the US dollar senior notes proposed by the Cambodia-based casino operator.
“The rating on the notes is the same as the issuer credit rating on NagaCorp because we see no elements of subordination risk in the company's capital structure. As of March 31, 2020, NagaCorp's capital structure consisted only of the existing US$300 million senior unsecured notes at the holding company level,” said the rating firm.
According to S&P, NagaCorp's strong cash balance of US$473 million as of March 31, can support its business for more than two years, even assuming zero revenue and minimum capital expenditure for 2020.
It also expects the company to sustain its dominant market position in the Cambodian gaming industry and continue to ramp up the group’s Naga2 operations.
“We also expect NagaCorp to appropriately manage the refinancing or redemption of its unsecured notes over the next 12 months,” it added.
NagaCorp owns and runs the NagaWorld casino complex in Phnom Penh. Its operations have been suspended since April 1 on the orders of the Cambodian government, as part of measures to prevent the spread locally of the novel coronavirus responsible for Covid-19 infection.