NagaCorp, controlled by billionaire Chen Lip Keong, said Tuesday it’s aiming to raise $200 million by issuing additional debt notes to strengthen its balance sheet as the Covid-19 pandemic in Cambodia weighs on earnings at its casino resort in the nation’s capital.
NagaWorld, NagaCorp’s integrated resort in Phnom Penh, has been closed since early March after 11 employees tested positive for Covid-19. To curb the further spread of the virus, Cambodia’s government last week banned gatherings of more than 15 people and ordered the closure of entertainment venues including casinos and nightclubs in and around the capital city.
“While our business operations remain suspended, we are not generating any revenues,” NagaCorp said in a filing to the Hong Kong Stock Exchange. In 2020, The company’s net profit slumped to $102 million from $521 million the previous year as gross gaming revenue halved following the temporary closure of NagaWorld for over three months due to Covid-19.
With the worsening pandemic situation in Cambodia this year, NagaCorp decided to issue the additional notes on top of the original $350 million notes issued in July 2020. It also said it was retrenching some of its employees, cutting the pay of remaining staff and scaling back the hotel’s food and beverage operations to improve cost efficiencies.
Despite the cost savings and the company’s current cash and deposits of $451.7 million as of April 30, 2021, and taking into account the $81.7 million dividends due to be paid next month, NagaCorp said “our liquidity could support more than six months of operating expenditure and interest expenses.”
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NagaCorp was founded by Chen, 73, in 1995 after winning a casino license in the Phnom Penh that runs through 2065, with a guaranteed monopoly until 2035. With a net worth of $3.4 billion, Chen was ranked Malaysia’s ninth-richest individual, according to the country’s rich list published last week.