NagaCorp raises $156 million from top-up placement

The Hong Kong-listed gaming and entertainment hotel complex operator in Cambodia attracts demand from Asia, the US and Europe.

NagaCorp, a gaming and entertainment hotel complex operator in Cambodia, has raised HK$1.21 billion ($156 million) from a top-up placement, after fixing the price at the bottom of the indicative range. The deal was launched at around 6pm yesterday in Hong Kong time, and the books were closed after about three-and-a-half hours.

Due to strong demand, the size of the deal was increased to 200 million shares from 193 million shares. The deal, which received good support from existing shareholders and a couple of large orders, ended up well oversubscribed, a source said last night. It attracted demand from investors in Asia, the US and Europe, the person noted.

The NagaCorp group owns, manages and operates the largest integrated gaming and entertainment hotel complex in Cambodia, called NagaWorld, according to the company’s earnings statement. NagaWorld is the only licensed casino in Phnom Penh, the capital city of Cambodia, and features a world-class 660-room hotel, 15 food and beverage outlets, a nightclub, a karaoke lounge, and a spa.

The company sold 200 million shares at HK$6.05 each, which represented a discount of 8.3% versus yesterday’s close of HK$6.60. The deal was marketed in a range between HK$6.05 and HK$6.18 per share, which translated into a discount of 6.4% to 8.3% to the latest close.

Fourth Star Finance acted as the initial seller, but given that this was a top-up placement it will then buy the same number of new shares issued by NagaCorp at the same price. This ensures that all the proceeds end up with NagaCorp. Both the company and Fourth Star Finance are subject to a 90-day lock-up.

NagaCorp announced in early February that its net profit rose 23% to $113.1 million in 2012 from a year earlier. It noted that the group continues to maintain operational efficiency through better cost control and effective marketing efforts in various market segments to maintain the interest of its gaming customers and drive incremental revenues.

The group said it recorded healthy growth in all its business segments, despite the volatile economic conditions in much of the developed world, thanks to the continued strong growth of the Indochina (Cambodia, Laos, Myanmar, Thailand and Vietnam) economies, where its operations are based. Tourist arrivals in Cambodia continued to significantly outpace worldwide tourism growth by recording an increase of 24% to 3.2 million visitors in the first 11 months of 2012, compared to the same period in 2011, it said.

NagaCorp’s share price, which was down 0.9% yesterday, has been on an uptrend since the start of the year, and is up about 40% year-to-date. The company was listed in Hong Kong in 2006.

In a volatile market day in Asia, the Hang Seng Index fell 1.5% yesterday, erasing all its gains for the year.

BNP Paribas and Morgan Stanley were arranging the top-up placement.

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