NagaCorp delays expansion of its NagaWorld integrated resort in Phnom Penh by four years

NagaCorp, a Hong Kong-listed company controlled by Malaysia’s Chen Lip Keong that operates casino gaming in Cambodia, announced that the scheduled expansion of its integrated resort NagaWorld in Phnom Penh has been extended by four years. The company also flagged a potential reduction in the size and scale of the “Naga 3” development as it looks to rein in its capital expenditure in the wake of the COVID-19 pandemic. 

Details of the amended development terms for the $3.5 billion expansion were outlined in a filing in which the firm revealed that it has entered into an agreement with its contractor updating the completion date of the original Design and Build Agreement from September 30, 2025, until September 30, 2029. The agreement is also subject to other further adjustments as mutually agreeable between Naga 3 Company Limited and the contractor, NagaCorp said.

According to the company, the extended deadline was necessary “in view of the external geopolitical, macroeconomic environment and the stiff global inflationary pressures.” In consequence, NagaCorp is “carefully and seriously” considering options of developing Naga 3 “matching revenue generation with capex expenditure, and such options shall include project resize.”

NagaCorp did, however, highlight it remains confident that it can fulfill all of its financial obligations and that “up to date, the fundamentals and the directions of the company remain unchanged.”

The extension comes after rating agency Moody’s Investors Service warned late last year that NagaCorp was facing a default on $421.7 million in outstanding notes due in July 2024, despite undertaking an offer at that time to repurchase up to $120 million of the outstanding notes. The agency said that it was particularly concerned over NagaCorp’s access to potential sources of funding given NagaWorld’s “slow recovery.”

NagaCorp recently reported gross gaming revenues at its Cambodian integrated resort of $117 million in the three months to 31 March 2023, with mass market volumes reaching 81% of pre-COVID levels.