Hong Kong-listed NagaCorp, operator of Cambodian integrated resort NagaWorld, said overnight it has entered into a loan agreement with its controlling shareholder Dr Chen Lip Keong for the provision of a US$80 million loan to help it pay down outstanding notes due 2024.
As reported by Inside Asian Gaming, the looming maturity of the 2024 notes has been a point of concern with Moody’s Investors Service warning last year that NagaCorp faces significant refinancing risks due to “limited sources of liquidity given its lack of bank facilities and divestible non-core assets.”
NagaCorp repurchased US$69.5 million of its notes last November, leaving around US$472 million outstanding.
According to details filed overnight, this latest loan from Dr Chen – who holds a 69.26% interest in NagaCorp via his family trust The Sakai Trust – carries an interest rate of 8% per annum but with no guarantee or security offered by the group. It will also be provided “for the sole purpose of refinancing and/or discharging part of the outstanding 2024 Notes upon their maturity.”
Detailing the reasons for the loan, NagaCorp said, “After careful consideration, the Company is of the view that the Loan will enhance the Company’s liquidity position with reasonable terms including, among others, competitive funding cost.
“The terms of the Loan Agreement were negotiated on an arm’s length basis between the Lender and the Company, after considering various alternative funding options available to the Company. The Company is of the view that the Loan, together with the cash resources of the Company, will be sufficient to discharge all of its financial obligations when the outstanding 2024 Notes mature in July 2024.”
NagaCorp had stated earlier this month that it was confident of discharging all financial obligations when the notes mature, citing improved cash resources on the back of better operating conditions at its Cambodian integrated resort NagaWorld.
The company recently reported a 12.1% year-on-year increase in gross gaming revenues in the first nine months of 2023 to US$379.0 million, with Adjusted EBITDA up by 17.4% to US$215.4 million mainly on the recovery of its premium gaming segments.