Star Vegas closure at 2 year mark, CEO offers loan facility
Border casino operator Donaco International Ltd says its directors have approved a new loan facility offered by the company’s chief executive Lee Bug Huy, to permit borrowing of US$5 million.
Monday’s announcement came as the firm passed the two-year milestone regarding the temporary closure of what had been its main money-earner prior to the Covid-19 pandemic, Star Vegas Resort and Casino (pictured in a file photo). In filings the company now refers to that property – in Poipet on Cambodia’s border with Thailand – as “DNA Star Vegas”.
The group also runs the Aristo International Hotel and associated casino, at Lao Cai, on Vietnam’s border with China.
In a Monday filing to the Australian Securities Exchange, regarding the loan facility, Donaco reiterated it had been “severely impacted by the Covid-19 pandemic and, in particular, the consequent closing of international borders which has significantly affected the level of patronage at its casinos in Vietnam and Cambodia”.
Donaco added: “The company was expecting DNA Star Vegas to reopen by now, but no indication has been formally received from Cambodian government authorities as to when this will occur. This follows the Cambodia government’s announcement mandating the temporary closure of all casinos from 1 April 2020.”
The firm said the funds made available under the facility provided by its CEO “will allow for continued balance sheet protection to guarantee the business remains in a sustainable position until wider conditions improve”.
The interest rate on the loan is 6.00 percent per year.
This is not the first time Mr Huy has provided Donaco with a loan. Last year, he agreed to make available to the firm up to US$7.8 million. Donaco had fully utilised that loan by March 2022, the firm said on Monday.
In a Friday update, Donaco had said its net cash from operating activities for the quarter to March 31 had been negative by AUD1.8 million (US$1.3 million), taking such operating deficit for the prior nine months to AUD4.4 million.
As of March 31, the firm had cash and cash equivalents of AUD3.5 million.
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