Ratings agency Moody’s has placed Cambodian casino operator NagaCorp under review, with a possibility to change its outlook to negative over concerns on its $472 million bond coming due in July of 2024.

The group notes that NagaCorp is ‘exposed to heightened refinancing risks’ due to the maturing of the bond next year ‘and tight funding conditions’, noting that it has ‘limited sources of liquidity given its lack of bank facilities and divestible non-core assets’.

The group does note that it ‘expects NagaCorp’s earnings to improve over the next two years’ as tourism to the country recovers and Chinese tourists come back.

It now estimates that the group will generate EBITDA of ‘around $370 million in 2023 and $485 million in 2024’. This is a strong rise compared to the $245 million in EBITDA registered last year, but still ‘remain below its earnings in 2019,’ notes Moody’s.

The group says that, even though the results are improving, it still believes NagaCorp ‘will likely rely on external financing to repay its bond’, noting that at the end of last year it only had cash and deposits of $175 million.

‘Together with expected operating cash flows of around $535 million through to June 2024, this is inadequate to cover the company’s cash uses’, including the bond and other spending including dividends and capital expenditure.

‘Nonetheless, Moody’s expects the company to continue incurring capital expenditure for its Naga 3 development project at this juncture, having outlined its construction targets for the year’.

According to the group’s yearly results, released in February, piling works were expected to be completed during the month, while mid-2023 building works on towers 1 and 3 will commence and tower 2 should be completed by 4Q23. Main building work will also commence in mid-2023.

Once completed, the combined resort will offer 5,000 hotel rooms, 1,300 gaming tables and 4,500 electronic gaming machines.