Donaco International Ltd has signed an exclusive term sheet to acquire “a significant gaming and hospitality business in Cambodia”, the company said. It did not provide further details on the acquisition target.
The Australia-listed firm “is currently conducting due diligence” investigations, it said in a filing on Monday.
Donaco already operates a casino hotel in Vietnam’s northern province of Lao Cai, bordering China’s Yunnan province. Joey Lim Keong Yew, Donaco’s chief executive, in August said the company had a “strong pipeline of potential deals in place”.
In its latest results report, the firm said it was focused on the Southeast Asia market, but that it did not rule out investing in other regions.
“The business proposed to be acquired is well-established and profitable, with good growth prospects,” Monday’s filing by Donaco stated.
It added: “Parts of the signed term sheet are binding, including an exclusive negotiation period extending into early 2015. This will enable the company to complete its due diligence investigations, and to finalise and sign long-form agreements.”
Donaco said it would fund the deal via existing cash reserves and new debt facilities, together with an equity component for the vendor. The final acquisition price has not yet been set.
It added that the acquisition target would serve a “distinct” market from its existing “China-facing business” in Vietnam, thus providing “diversification as well as scale benefits”.
Cambodia’s gaming scene is dominated by NagaWorld, operated by Hong Kong-listed NagaCorp Ltd. The development is the country’s largest casino complex and the only in capital Phnom Pehn. It is currently undergoing an expansion – Naga2 will include more than 1,000 new hotel rooms and luxury suites, up to 300 gaming tables and 500 electronic gaming machines.
But the country has proven to be a challenging landscape for smaller operators.
Last month, Australia-listed Cell Aquaculture Ltd pulled out of a deal to gain control of the Roxy Casino, in Bavet, a Cambodian town with approximately 10 casinos on the border with Vietnam. The company said the termination of the agreement occurred due to difficulties in hiring skilled management personnel.
In September, Israeli casino developer Queenco Leisure International Ltd expressed “substantial doubts” about the ability of its Queenco Casino and Hotel to continue in business. The property is located in Sihanoukville, a coastal area in southwest Cambodia.
Cambodia is currently mulling allowing casinos within its borders to open their doors to local players.
Nov 01, 2017Sponsored content | A wide range of innovative and entertaining products will take centre stage on Aristocrat Leisure Ltd’s stand at the 2017 MGS Entertainment Show. The firm’s products will be available at booth #AO38. “At Aristocrat, we continually strive to use our passion, dedication and...
Nov 23, 2017Macau’s gross domestic product (GDP) expanded by 6.1 percent year-on-year in real terms in the third quarter of 2017, show data released on Thursday by the city’s Statistics and Census Service....
Nov 23, 2017
Oct 23, 2017The presence of some of the leading cloud computing...
Jul 11, 2017The Tokyo local election setback for Japan’s governing...
Jul 06, 2017A multibillion U.S. dollar casino project on Vietnam’s...
Jun 20, 2017Online gaming compliance testing services have become an...
Jun 01, 2017Macau-based casino operator Galaxy Entertainment Group Ltd...
”The project [in South Korea] continues apace in terms of detailed design, where we have now reached the 90 percent threshold”
Chief executive of U.S. tribal casino operator Mohegan Gaming and Entertainment