Cambodia’s gaming operator NagaCorp will receive up to an $80 million loan at 8 percent annual interest from the Chen family-controlled trust to meet upcoming financial commitments associated with senior notes due next year.
According to the voluntary announcement, the Hong Kong-listed company notes that ‘no guarantee or security will be provided by the group for the loan.’
The lender is ChenLipKeong Capital Ltd, a privately held company registered in the Cayman Islands. It is entirely owned by The Sakai Trust, a family trust established by Chen Lip Keong as the settlor, with the purpose of benefiting himself and his family.
NagaCorp operates NagaWorld, a casino resort monopoly in the Cambodian capital, Phnom Penh.
The announcement also mentions that during the financial year ended on December 31, 2022, the company repurchased the 2024 Notes with an aggregate principal amount of $77,845,000, with a purchase price ranging from 91.83 percent to 92.10 percent, totaling $73,003,000.
‘Following the cancellation of the repurchased 2024 Notes, the 2024 Notes with an aggregate principal amount of $472,155,000 remain outstanding as of the date of this announcement. After careful consideration, the company believes that the loan will enhance the company’s liquidity position with reasonable terms, including, among others, competitive funding costs.’
‘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.’
According to the latest research from Citigroup, due to the demise of the VIP junkets sector, NagaCorp’s EBITDA is unlikely to return to pre-COVID levels “anytime soon,” as the company had a “historical over-reliance on VIP GGR.”
The company posted a GGR of $252.3 million in 1H23, increasing by 7.9 percent compared to 1H22.