Donaco International Ltd, an operator of border casinos in Cambodia and Vietnam, has flagged a delay in the deal that will see one of its investors – a Hong Kong-based investment fund – acquire 100 percent of Donaco’s shares.
“Donaco previously advised that the scheme booklet … would be dispatched on approximately 6 May 2025, with the scheme meeting to be held on 3 June 2025,” the casino operator said in a Friday filing to the Australian Securities Exchange, referring to the paperwork needed for the transaction, known as the “scheme implementation deed”.
The filing also referred to information still to be provided to an “independent expert” tasked with assessing the deal.
“The delay in meeting the original timeline has arisen as third parties have taken longer than initially forecast to return valuation inputs to the independent expert, lengthier than expected analysis of change of control provisions under Cambodian and Vietnamese law, and numerous recent holiday periods across Australia, Vietnam and Cambodia,” stated the firm.
“As a result, the independent expert has been unable to complete its report – through no fault of the independent expert – which has caused follow-on delays to lodgement of the scheme booklet with the Australian Securities and Investments Commission for their review,” it added.
Donaco runs the DNA Star Vegas resort at Poipet, on Cambodia’s border with Thailand; and the Aristo International Hotel at Lao Cai, in Vietnam, near that country’s border with China.
In mid-March, Donaco said it had “entered into a binding scheme implementation deed with On Nut Road Ltd” for the latter’s “proposed acquisition of 100 percent of the shares in Donaco that it does not already own, via a scheme of arrangement for AUD0.045 [US$0.028] cash per Donaco share.”
On Nut Road is described as a special purpose vehicle managed by Argyle Street Management Ltd, a Hong Kong licensed fund manager. On Nut Road had been an investor in Donaco since 2019, currently holding 12.84 percent of Donaco’s issued capital.
In Friday’s update, Donaco said it would “advise on an updated scheme timetable once the independent expert has completed its report, the scheme booklet is finalised and updated court hearing dates have been confirmed”.
Tax uncertainty
Donaco reported net revenue of AUD10.03 million for the first three months of 2025, compared to AUD12.65 million in the prior-year period.
The Australia-listed firm said in late April that group-wide earnings before interest, taxation, depreciation and amortisation (EBITDA) stood at AUD4.10 million in the reporting period, down nearly 48.0 percent from a year earlier.
In Friday’s update, Donaco also provided an update regarding the group’s gaming revenue tax in Cambodia. The company currently pays a mandatory contribution of 7 percent of gross gaming revenue (GGR) at Donaco Star Vegas to the Cambodian Commercial Gambling Management Commission, under its gaming licence.
The firm said a potential further 10-percent value added tax (VAT) on GGR had been deferred “until at least the end of 2024”, and casino firms in Cambodia “generally expected that the deferment would continue indefinitely thereafter”.
“Legal advice which was recently obtained by the Donaco group to clarify its ongoing tax liabilities has made it clear that a liability to pay the new tax on gross gaming revenue does exist in respect of gaming revenue earned since 1 January 2025, notwithstanding that no tax assessment has yet been rendered on Donaco, including in respect of the 10-percent VAT,” said the firm in its Friday filing.
It added: “Should that liability actually crystalise, Donaco would estimate additional tax payable in the form of 10-percent VAT, for … 1 January to 31 March 2025, would be in the order of AUD666,000, at current exchange rates.”
“Ultimately, any tax payable would be subject to final Cambodian government determination,” stated Donaco.
