NagaCorp, operator of Phnom Penh’s leading integrated resort, NagaWorld, has announced the termination of a subscription agreement to help fund its $3.5 billion Naga 3 expansion.
Despite the termination of the agreement, the company indicated that it ‘intends to continue with the development of the Naga 3 Project’.
The agreement was signed in 2019 and encompassed the group’s then-controlling shareholder Dr. Chen Lip Keong contributing 50 percent of the expected costs for the build-out, around $1.76 billion, as well as any potential cost overruns.
This was to be settled by way of a rights issue of settlement shares at a price of HK$12 ($1.54) per share for the controlling shareholder. The rest was set to be ‘funded by internally generated funds’.
The filing on December 15th of this year indicated that there was a deed of mutual termination of the agreement signed, waiving claims in connection with the subscription agreement.
Due to the termination, the cash advances already provided – totaling $316 million paid by the subscriber – has been ‘forfeited and taken to reserves’, and no settlement shares would be issued.
The group notes that, given it will continue the development of the project, it ‘will evalute the remaining development plan of Naga 3 and explore alternative sources of funding, if necessary’.
NagaCorp had previously announced that it was pushing back the completion of Naga 3 by four years, to September of 2029, after previously expecting its completion by September of 2025. This also included a project resize.
Initially the project was expected to elevate the resort’s offerings to 5,000 hotel rooms, 1,300 gaming tables and 4,500 electronic gaming machines.
