Naga CEO seeks to convert TSCLK bonds

A proposed conversion of TSCLK Complex convertible bonds, owned by NagaCorp CEO Dr. Chen Lip Keong, would take his ownership to above 50 percent, up from his current 39 percent, said Union Gaming in a note on Monday.

The TSCLK Complex (Naga 2) and NagaCity Walk was funded initially by Dr. Chen, at and agreed value of around US$369 million. In January 2012, a resolution was approved to issue two separate convertible bonds to Dr. Chen, given to him after he handed over the two projects to the company last year.

Dr. Chen now seeks to convert the TSCLK Complex bonds to 1.4 billion shares, based on a conversion price of HK$1.5301 per share.

According to the brokerage, the move would result in Dr. Chen being “required to make a mandatory general offer for all the issued Shares not owned or agreed to be acquired by Dr. Chen immediately following the issue of the Conversion Shares pursuant to the Proposed Conversion unless the Whitewash Waiver is obtained.”

The conversion of the bonds and whitewash waiver is however still subject to independent shareholder approval at the July 21 EGM.

The circular on Friday also included an independent valuation of the TSCLK Complex and NagaCity Walk of US$3 billion and US$128 million respectively.