NagaCorp said Sunday that Naga 3, the third phase of its NagaWorld casino resort, will cost around $3.5 billion
Casino and hospitality company NagaCorp said in a Sunday filing that its founder, CEO, and largest shareholder would cover half of the costs related to the development of Naga 3, a major expansion of its existing integrated resort in the capital of Cambodia, Phnom Penh.
NagaCorp is the exclusive operator of casino gambling in the Cambodian capital and the surrounding area. The company announced its plan for the construction of Naga 3, the third phase of its NagaWorld hotel, casino, and entertainment complex earlier this month.
NagaCorp said in its Sunday filing that it has decided, following a consultation with its financial advisers, Credit Suisse and Morgan Stanley, that 50% of the Naga 3 development project will be funded by internally generated funds. The other 50% will be covered by the company’s controlling shareholder, Dr. Chen Lip Keong.
Aside from NagaCorp’s largest shareholder, Dr. Chen is also the company’s founder and Chief Executive Officer.
According to the Sunday statement, Naga 3 will include five towers, of which two 45-story towers, two 66-story towers, and one 48-story tower. The whole resort will spread across 544,801 square meters/5,864,236 square feet.
Naga 3 will feature multiple new hotels, food and beverage facilities, swimming pools, meeting and event facilities, and VIP gaming rooms, among other amenities.
Total Cost of the Project
NagaCorp said on Sunday that Naga 3’s project appraiser, Colliers, is of the opinion that project costs, excluding land cost, are reasonable at $3.5 billion for a total gross area of 544,801 square meters. The price was decided upon after NagaCorp had provided Colliers with two development cost estimates by two separate architects.
DRTAN LM Architect had valued the Naga 3 project at $3,515,011,000, while Steelman Partners had come up with a $3,291,685,200 preliminary estimate.
Naga 3 will represent the third expansion phase of NagaCorp’s original NagaWorld integrated resort. The property, which is now referred to as Naga 1, opened doors on its current site in 2003. Prior to that, NagaWorld had operated as a riverboat casino for nearly two decades.
In late 2017, NagaCor launched Naga 2, the integrated resort’s second expansion phase. Naga 1 and Naga 2 are connected via the underground shopping center NagaCity Walk. Naga 3 will, too, be linked to its sister properties via the subterranean facility.
NagaWorld said in its Sunday filing that key benefits from its financing strategy for Naga 3 would include cash advances nil of interest costs, continued high dividend policy for minority shareholders, and mitigation of any potential dilutive effects as a result from incremental earnings from Naga 3, among others.
As part of the agreement under which Dr. Chen will partly finance the project, the NagaCorp CEO will receive 1.14 billion settlement shares in the company. This will increase Dr. Chen’s stake in Naga Corp to 73.17% from 66.1%.
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