The company’s senior unsecured rating on U.S. dollar bonds was also downgraded to “B3,” the rating agency said. The bond noted that it is under “unconditional and irreversible” guarantees by Naga Inc.’s major operating subsidiaries. 파칭코사이트인포
Nagakov holds a long-term exclusive casino license for Cambodia’s capital Phnom Penh, and operates the Nagaworld Resort Complex.
“The downgrading and negative outlook reflect the lack of progress in refinancing by Naga Corp on US$472 million bonds that mature in July 2024. As mentioned in the report, bonds form all of the company’s liabilities in the capital structure,” Moody’s analyst Yu Sheng Tay said.
“Despite Naga Inc.’s reduced discretionary spending, its ability to repay bonds now depends on the pace of uncertain earnings recovery,” the analyst added.
Moody’s said, “As the financial situation of high-yield Asian companies is still tight, the possibility of an unstable exchange has increased.”
“NagaCorp has limited liquidity sources given the lack of banking facilities and disposable non-core assets,” it added.
The rating agency expects Nagakov’s discretionary spending to fall “over the next 18 months.”
In early June, the casino company announced that the construction of the naga 3 added to the naga world game complex had been postponed by four years to September 2029. Naga Corp, which has not paid any cash dividends since 2021, will pay scrip dividends instead of cash, as announced in April.
Moody’s said it expects Nagakov to spend “less than $50 million on development capital expenditures in 2023, compared to the company’s previous guidance of $100 million to $125 million.
“Moody’s sees NagaCorp’s decline in discretionary spending as a credit positive. However, the company’s ability to generate enough free cash flow to repay bonds depends on the pace of earnings recovery, which is currently uncertain,” it added.
According to the agency, Naga Inc.’s earnings are likely to “improve over the next 18 months” as Cambodia’s tourism sector continues to recover and benefit from the return of Chinese tourists.
Moody’s predicted that casino operators could generate revenue before interest, taxation, depreciation and amortization (EBITDA) of “approximately $350 million to $370 million in 2023 and $485 million in 2024.”
In Q1 2023, the company generated $59 million in EBITDA, down 3.3% year-over-year, “due to increased employee costs and lucky factors.”