Australia-listed casino operator Donaco International Ltd said in a filing on Wednesday that the acquisition of the casino resort business at Star Vegas Resort and Club (pictured) in Poipet, Cambodia, had been successfully completed that day.
Donaco has also signed a binding agreement for a US$20-million working capital facility in accordance with terms agreed on June 23. It additionally said it had also agreed to issue warrants over a total of US$7 million worth of its own shares to the lender under the working capital facility.
Poipet is near Cambodia’s border with Thailand. Star Vegas serves principally Thai gamblers, according to previous filings by Donaco. There was recent talk in the Thai media of the military government there moving to legalise casinos in Thailand. But the Thai Prime Minister, General Prayut Chan-o-cha, was subsequently quoted saying his administration had more important things to think about.
Donaco stated in a May filing to the Australian Securities Exchange that it had a “vendor warranty” that Star Vegas’ earnings before interest, taxation, depreciation and amortisation (EBITDA) “will total at least US$60 million per year for the two full years following acquisition”. The firm said any EBITDA shortfall compared to that estimate would be “topped up by the vendor in cash”. The vendor will manage the Star Vegas property for two years following completion of the deal.
Donaco also operates a casino-hotel called Aristo International Hotel in Lao Cai province in Vietnam, on that country’s northern border with China.
According to other filings, Donaco was founded in 2002 by the firm’s current managing director and chief executive Joey Lim Keong Yew, and one of his grandfathers, Lim Goh Tong, founder of Malaysian conglomerate Genting Group. The latter – via various units – has casino interests in Malaysia, Singapore, the United States, the Bahamas and the United Kingdom.
On Friday, Donaco announced that Chong Kwong Yang had been appointed chief financial officer, with effect from July 1.
Mr Chong was previously deputy CFO. His predecessor as CFO, Richard Na Chun Wee, remains with the company in his other capacity as deputy chief executive officer.
(Updated 6.30pm, July 3)
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