Donaco International Ltd, an Australia-listed boutique operator of casinos in Indochina, says it is suspending — for two months — all litigation between the company and the former owners of its Star Vegas Resort and Club (pictured in a file photo) business in Poipet, Cambodia. The two parties have agreed to use the two-month period for settlement negotiations.
Donaco’s board said in a filing to the Australian Securities Exchange on Monday that the firm had signed a memorandum of understanding with the Thai vendors of the Star Vegas business, under which “all litigation matters” between the two sides “have been suspended for two months, to allow the parties to conduct settlement negotiations.”
Donaco said the suspension applied to a Singapore arbitration claim against the Thai vendors, a lease dispute in Cambodia, and “all other litigation matters” in Cambodia, Thailand and Australia.
Legal wrangling between Donaco and the trio of former Thai partners has been a constant for the past years. The three sold the Star Vegas in Poipet to Donaco for US$360 million in 2015. The agreement between the parties included a non-compete clause, which Donaco says has been breached. The parties have attempted a number of resolution methods, including proceedings in several jurisdictions.
Donaco said last month it had a “poor overall result” in the three months to December 30, 2019, due to weaker gaming business in December at the firm’s casinos. Donaco’s group-wide earnings before interest, taxation, depreciation and amortisation (EBITDA) for the December-quarter were AUD3.09 million (US$2.07 million), a 64.6 percent decrease when compared to the AUD8.72 million in group EBITDA a year ago.
Donaco’s flagship venue, the Star Vegas Resort and Club, is near Cambodia’s border with Thailand, a country where casino gambling is illegal. Its Aristo International Hotel and associated casino are near Vietnam’s border with China.
The group’s management is again in a period of transition after a boardroom battle and resignations.
