Hong Kong-listed NagaCorp says it has enough cash on hand to last 18 months with minimal revenue as it considers conducting an offering of notes to investors to boost liquidity.
Details of the proposal, published Monday, included information on the company’s current financials with NagaWorld’s casino operations having remained suspended since 1 April 2020 as part of Cambodia’s COVID-19 prevention measures. NagaWorld is currently operating its Naga 1 hotel at reduced capacity with limited food and beverage facilities but the hotel at Naga 2 remains closed.
In a filing, NagaCorp said its average monthly expenditures before COVID-19 were US$18.4 million including US$13.9 million in run rate operating costs, US$1.3 million in maintenance CapEx and interest expense of US$3.2 million. The company has since reduced monthly run rate operating costs to US$3.9 million by scaling back facilities and reducing payroll expenses.
Citing cash and deposits of US$527.1 million as of 31 May 2020, NagaCorp stated, “After giving effect to the application of proceeds of the Proposed Notes Issue … our liquidity could support approximately 18 months of operating expenditure and interest expenses, with minimal revenue.”
While NagaCorp didn’t reveal the scale of the proposed offering, it did state that its founder, controlling shareholder and CEO, Dr Chen Lip Keong, has committed to subscribe for up to US$45 million “to show his support for and confidence in the Group.”
NagaCorp is also in the process of developing Naga3, its US$3.5 billion NagaWorld expansion set to comprise almost 5,000 new hotel rooms, additional gaming facilities, retail, restaurants, a theme park, spa and conference space. The additional gaming space is planned to house up to 800 more gaming tables and 2,500 EGMs.