NagaCorp, the largest hospitality and gambling group in Cambodia, has announced plans to spend up to $3.5bn nearly quintupling the footprint of its NagaWorld casino in Phnom Penh.
The company revealed in a filing (in pdf) on Monday that it had discussed with its financial advisers, Morgan Stanley and Credit Suisse, how best to finance the project. When everything was laid out on the table, NagaCorp determined that it could cover 50% of the development through funds generated from within the company. The other 50%, or roughly $1.75 billion, would be provided by Chen.
Naga 3 will include five separate towers, two of which are 45 stories tall, another two are 66 stories and the fifth is 48 stories. The resort covers over 5.8 million square feet and Naga 3 will add the new towers, meeting and event facilities, VIP gaming rooms and new food and beverage options for guests.
The project’s price is considered reasonable, according to its appraiser, Colliers, who reached its opinion after reviewing cost estimates that had been provided by two architects. One, DRTAN LM Architect, valued the project at $3.51 billion and the other, Steelman Partners, estimated a price tag of $3.29 billion.
NagaWorld first launched in 2003 as what is now known as Naga 1. It launched Naga 2 in 2017 as the second expansion phase and both facilities are connected by an underground shopping center called NagaCity Walk. That center will also be used to connect Naga 3 to the two other sections of the resort.
As a result of Chen’s participation in the construction, he will receive 1.14 billion settlement shares in NagaCorp. This increases his stake in the company from 66.1% to 73.17%.
According to the filing, “These mutually beneficial terms extended to the Company by the Controlling Shareholder is because the Controlling Shareholder believes that considering today’s financial status of the Company, it is only through the combined efforts of the Company and the Controlling Shareholder that a larger budget size of about US$3.5 billion can be attained without too much financial burden to the Company.
Together, the vision of a bigger and stronger Group positioned to react to the unprecedented tourism opportunities presented by the policy of China “One Belt One Road” can be realized. At the same time, the Company is in a stronger stead to compete in the Asia Pacific area. Only then, the corporate objective of the Group to attain the expansion milestones of a global gaming powerhouse can be accelerated in a shorter time frame.”