Moody’s: NagaCorp must generate US$135 million in free cash flow by July to repay maturing bonds

Moody’s Investors Service has described a US$80 million shareholder loan provided to NagaCorp by its controlling shareholder, Tan Sri Dr Chen Lip Keong, as “credit positive” for the firm but said refinancing risks still remain.

As reported by Inside Asian Gaming, the US$80 million is to be put towards repayment of US$472 million in outstanding bonds due July 2023, with the remainder to be paid from cash on hand.

This, says Moody’s, could be problematic for NagaCorp because with US$298 million in cash and cash equivalents, and assuming it maintains a working cash balance of US$40 million and fully draws down the $80 million shareholder loan, the company will need to generate free cash flow of US$135 million over the next three quarters to cover the bond maturity.

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