GGRAsia – Asian casino op Donaco closes deal to refinance bank loan

Asian casino op Donaco closes deal to refinance bank loan

Aug 15, 2017 Newsdesk Latest News, Rest of Asia, Top of the deck

Australia-listed casino operator Donaco International Ltd has made binding agreements with Mega International Commercial Bank Co Ltd to refinance a current term loan facility with the lender.

The new facility will be for an aggregate of US$57 million, Donaco stated in a Tuesday filing. “The term has been extended to three years from the date of drawdown, expected to be in late August 2017,” the company said.

Under the new loan, 15 percent of the principal amount is repayable every six months, Donaco said. The interest rate on the loan has been set to a margin of 6.0 percent over the six-month London Interbank Offered Rate (LIBOR).

Donaco’s existing loan facility was originally for the principal amount of US$100 million, drawn down in July 2015, with a margin of 6.75 percent over the six-month LIBOR rate. An additional US$20 million was drawn down in July 2016, “to repay a separate working capital facility”, the company stated in Tuesday’s release.

Donaco said it had repaid a total of US$63.4 million of the current facility, with the remaining principal amount standing at US$56.6 million, which was to be repayable within the next 12 months.

Donaco started operations with a single casino property in Vietnam: the Aristo International Hotel in Lao Cai, near that country’s border with China’s Yunnan province.

In 2015 Donaco acquired the Star Vegas Resort and Club (pictured) – a casino venue located in Poipet, Cambodia, on the latter country’s border with Thailand, another country where casino gaming is also not permitted. In autumn 2016, Donaco said it had started managing – for a monthly fee – gaming operations at Star Paradise, a property neighbouring Star Vegas.

Donaco announced in July it would be adding approximately 100 gaming tables in the next few months to its Star Vegas. The expansion of the gaming floor is the result of a deal with a marketing firm to bring new junket operators to the property.

Net profit after tax at Donaco rose 5 percent year-on-year in the six months to December 31, 2016. Such net profit was AUD14.8 million (US$11.7 million) compared to AUD14.1 million in the prior-year period.