NagaCorp, a casino operator in Cambodia, has announced the issuance of $2m 7.95% senior notes due 2024.
According to the statement, “the order book reached an amount of over $580m” and “the company believes the success of this transaction reflects investors’ confidence in the company’s long-term strategy and solid credit profile.”
The notes were issued to strengthen NagaCorp’s working capital and for other general corporate purposes, and the net proceeds from the notes should be approximately $211.5m.
After the issuance, Moody’s Investor Service assigned the notes a B1 rating, a non-investment grade. The notes should help support the company for up to two years, reports GGRAsia.
“The rating affirmation reflects our expectation NagaCorp’s tap issuance will provide the company with sufficient liquidity to fund its cash burn over the next 18 to 24 months, should its casino operations remain suspended,” said the analysts.
NagaCorp’s casino in Phnom Penh has been temporarily closed since March, due to a spike of Covid-19 cases in the country, thus limiting revenue from gaming activities.
The company said that two months before closure, it spent an average of $19.7m per month on the venue. The run rate was $8.6m and the company is now seeking to reduce it to $6.6m.
Part of the reductions will include job cuts and lowered employee pay. Recently NagaCorp let go of close to 1,300 workers, sparking outrage among members of the workers’ union, with plans to submit a complaint to the Labour Ministry, reported Asia Gaming Brief.
Yet the company maintained it will “provide affected employees with enhanced termination compensation over and above payments required by the applicable Cambodian laws, to assist their transition into other career or business interests.”