Moody’s downgrades NagaCorp corporate family rating
Analysts at Moody’s Investors Service have downgraded NagaCorp’s corporate family rating from ‘B1’ to ‘B2’.
Cambodia.- Moody’s Investor Services has downgraded the corporate family rating of NagaCorp Ltd due to a slower-than-expected operational recovery. It believes the company will likely require external financing to repay its outstanding US$545m bond maturing in July 2024.
Moody’s analyst Yu Sheng Tay also stated: “The refinancing risk is exacerbated by tight funding conditions in the current economic environment and limited sources of liquidity for the company.”
Moody’s downgraded its senior unsecured rating of NagaCorp’s US dollar bond from ‘B1’ to ‘B2’. It added that its rating outlook for the casino operator remained ‘negative’.
Last June, NagaCorp completed its issue of US$200m in 7.95 per cent senior notes with a July 6, 2024 maturity. In August, the company repurchased notes of an aggregate principal amount of US$1.6m, representing approximately 0.29 per cent of the aggregate principal amount of the 2024 Senior Notes.
The company also repurchased part of its 2024 senior notes in September and early October, involving an aggregate amount of just over US$5.2m.
Analysts said that while NagaCorp expected to generate sufficient operating cash flow to support its liquidity needs through June 2024, the casino operator may require external financing to repay its dollar bonds. Moody’s forecast that NagaCorp will generate earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately US$252m in 2022, followed by EBITDA of US$352m in 2023.
NagaCorp has recently reported that gross gaming revenue (GGR) was down 16.3 per cent quarter-on-quarter from US$127.4m to US$106.6m in the third quarter of the year. For the first nine months of the year, it reported earnings before interest, tax, depreciation and amortization (EBITDA) of US$183.2m.
According to Moody’s, NagaCorp’s earnings in 2022 and 2023 will be still significantly lower than in 2019, when NagaCorp reported net income of about US$521.3m.
Cambodian government denies it’s holding up NagaWorld labour disputes
As previously reported by Focus Gaming News, the Ministry of Labour and Vocational Training has issued a statement it denying that it’s responsible for stalled negotiations over the Nagaworld labour dispute. The ministry responded after being accused of inaction and indifference to the drawn-out conflict.
It said that since the parties were not willing to participate in collective labour resolution procedures, their differences will probably need to be settled in court.
The ministry added that 244 out of 373 former employees have accepted compensation offered by the company. A meeting has been scheduled for October 6 to mediate a solution for the remaining layoffs.
NagaWorld employees began their strike on December 18 2021 in protest against NagaCorp’s layoffs and pay cuts that aimed to improve cost efficiency due to the impact of the Covid-19 pandemic. Government-mediated negotiations with the casino operator have failed to bear fruit.
