Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of [Paul Sante] – [Paul de Sante Partners].
[Paul Sante] – [Paul de Sante Partners]
The voice quality on this call is not particularly good and it is hard to understand you. Could you repeat what you said about the potential for additional financing to promote growth?
Clarence Chung
I am sorry about that. In terms of the additional financing obviously while we are confident we have the sufficient cash and machine inventory to support our existing operations and the contracted expansion projects, I think we are continuing looking at potential new opportunities and depending on the investment part and capital requirements we might need to seek financing for such future projects but if, and only if, the anticipated returns warrants that kind of action.
[Paul Sante] – [Paul de Sante Partners]
Would the potential financing be likely to be debt or equity?
Clarence Chung
I think there are various options and I would not limit ourselves in terms of any one of the particulars. Obviously if there is a need obviously we would explore all the options in front of us and try to make that decision in the best interest of our shareholders.
[Paul Sante] – [Paul de Sante Partners]
When do you expect paying the full $5+ million commitment fee to NagaWorld and when you do what do you expect your cash on hand will be?
Andy Tsui
We actually made the payment in early August, the $5.8 million to NagaWorld. It depends on our net win projection. We do have an internal projection if we maintain net wins, for example, at $200 we expect we will recoup it in a 6-9 month period.
[Paul Sante] – [Paul de Sante Partners]
So you expect to recoup it in a 9 month period?
Andy Tsui
Yes, assuming that the net wins remain at around $200.
[Paul Sante] – [Paul de Sante Partners]
Do you have any estimates about whether the addition of those machines might it drag down the win below $200? In my estimates I was assuming that with the addition of those new machines I was modeling at $175 because of the potential dilution to the current program.
Andy Tsui
I think that is a good question. I think the impact will be, as I mentioned in the script, currently we are consistently the net win is about $200 for the last probably 3 months. We are seeing strong interest and strong growth. Having said that it is normal to thinking there will be potential cannibalization relating to the property. But having said that, we do think the Cambodia market, in particular the Phnom Penh market, has not been mature in terms of recruiting customers because if you look at the number of machines in the market, especially in the Phnom Penh market, six months ago or before the regulations or directives I think it is easily over 1,000 or more machines on the market in the various slot venues serving the customer needs.
- To read the full transcript on Seeking Alpha, click here »
