NagaCorp has confirmed the cost of its Naga Three development in Phnom Penh will hit $3.5bn, partly funded by its own CEO Chen Lip Keong, providing an additional 5.86m sq ft at its Cambodian flagship venue NagaWorld casino resort.
The figure, which excludes land costs, forms a “guaranteed maximum sum design and build agreement” with long-term construction partner CCAG Asia Ltd, with the phase expected for completion before 30 September, 2025.
CCAG will deliver a “fully completed and operational Naga Three equipped with theme park equipment, furniture and fixtures, security like CCTV, specified information technology systems, full hotel operating services and equipment and utility connection cost,” according to a statement from NagaCorp.
After consulting with Colliers International Hong Kong, the firm added that “given the limitations from external financing, development risk and based on the advice given by its financial advisers 50 percent of development costs shall be funded by internally generated funds, and the balance of 50 percent by the controlling shareholder.”
Chen currently owns 66.1 percent of NagaCorp’s shares, and in return for awaiting repayment “upon completion and handing over of a fully operational Naga 3” and being responsible for “all costs overrun,” he will receive 1.14 billion settlement shares, bringing his stake in the company up to 73.17 percent.
The share handover is equivalent to $1.76bn, incorporating a premium of 29 percent on NagaCorp’s current trading price.
The firm added the decision had been made in light of “key advantages” the agreement would facilitate, such as “cash advances nil of any interest costs to the company.”
The Naga Three construction will add 4,720 hotel rooms to the NagaWorld complex across four hotel towers and a 55-storey “condotel,” with the third phase construction linked to Nagas One and Two by NagaCity Walk, which includes a below-ground shopping centre.