Donaco Says Star Vegas Deal Postponed Waiting For Mega Bank OK

Donaco International said payments related to the settlement of its long-standing dispute with those who sold its Cambodian casino complex Star Vegas Resort and Club (pictured) would be deferred until approval from a key lender for Taiwan Mega International Commercial Bank Limited Donaco.

Mel Ashton, chairman of Donaco, a boutique Australia-listed casino operator in Indochina, said in a filing on Friday: "We are excited to reach a transformation with DNA Star Vegas and Donaco Hong Kong, which provides more certainty about settlement as we continue to seek the necessary consent from Megabank."

He added: "The settlement payment will be put on hold until we have the consent of Mega Bank and will then be offset at that point."

He also added, "We are also pleased that the parties have agreed to delay the payment of additional US$20 million in rent as part of the changes in the agreement. We appreciate the cooperation of the parties. The economic interests of all the parties are in sync and these measures remove uncertainty about the agreement and lease as we work to finalize the bank's agreement."

According to previous data submitted by Donaco, the company acquired Poypet's Star Vegas, located on the Thai-Cambodian border, from the Thai firm in July 2015 for a total of $360 million.

On March 2, the Donaco-listed company told the Australian Stock Exchange it had agreed to remove a non-competitive and non-graft clause regarding its Star Vegas resort and club business in Puypet as part of a deal to end several court cases and arbitration disputes.

In return, Donaco will receive US$38 million from the parties concerned, plus an additional US$20 million in rent to companies connected to suppliers in return.

At the end of March, Donaco said it was in the process of seeking an agreement from Megabank.

Since then, the Cambodian casino has been temporarily closed since April 1 due to the COVID-19 pandemic.

Donaco also operates the Aristo International Hotel and related casinos near the border between Vietnam and China. Its gaming business has also been suspended due to the COVID-19 outbreak.

On April 7, Donaco said in a filing that "cash exhaustion" would likely cost up to $900,000 per month if the two outages were significantly extended beyond the initial two-week period.

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