Hong Kong-listed NagaCorp has confirmed recent reports of substantial staff cuts at its Cambodian integrated resort NagaWorld, citing a need to maintain operational and financial flexibility.
The news follows media reports suggesting NagaCorp was laying off around 600 employees due to financial hardships brought about by the COVID-19 pandemic, with NagaWorld having now been closed for more than three months due to the nation’s worsening pandemic situation.
In a Monday filing, the company said it has taken “proactive measures to manage the situation” including a rationalization program to improve cost efficiency. While it didn’t outline how many employees would be affected, NagaCorp said it was providing affected employees with “enhanced termination compensation over and above payments required by the applicable Cambodian laws to assist their transition into other career or business interests.”
The majority of affected employees have signed mutual separation agreements, it added.
NagaCorp is looking to save up to US$2 million per month in run-rate operating costs, which the company said stood at around US$8.6 million prior to the suspension of operations on 1 March 2021 – almost half of NagaWorld’s average monthly expenditures of US$19.7 million in January and February.
Aside from the reduced workforce, it is scaling back of hotel and food and beverage operations, and closing other facilities as required.
NagaCorp also announced Monday plans to issue additional notes, to be consolidated with US$350 million original notes issued in July last year. The offer price and aggregate amount of the additional notes has yet to be determined.
Pointing to its current cash and deposits of US$451.7 million as of 30 April 2021, and taking into account dividends of US$81.7 million due to be paid in July, NagaCorp said it has enough liquidity to survive for at least six months on minimal revenue before it may need to access the proceeds of the additional offering.
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