Vendor war continues
Australia-listed casino operator Donaco International Ltd. is looking to free up enough cash to pay off US$39.9 million it owes to Mega International Commercial Bank Co. Ltd. in Taiwan. Its collateral for the loan was the Star Vegas Resort in Poipet, Cambodia, near the border with Thailand.
“Discussions are currently being held with several parties who have put forward proposals to unlock the value of the company’s assets, and provide value to shareholders,” Donaco informed the Australian Securities Exchange. “To assist the board to consider the various proposals, the board is currently in discussions with potential strategic advisers.”
The company said it expected the review to take about three months and that it would keep investors informed about its progress, reported GGRAsia.
Earlier this month, Donaco announced that CEO Joey Lim has begun a three-month hiatus to “deal with health and personal matters.” Few details were offered about his leave of absence, but the company said Lim will continue in a reduced role for the company and at a reduced salary as well, taking a 30 percent pay cut for the 90-day term.
His brother Ben Lim, director of Donaco Singapore Ltd. has been appointed interim managing director and CEO reporting to the board. Concurrently, the board will conduct an international search to recruit a deputy CEO and new chief operating officer.
Donaco continues to be embroiled in a dispute with a Thai vendor for breach of contract and illegal competition in Poipet, although the Cambodian Court of Appeal recently overturned a preliminary injunction that would close the competitor’s two casinos. That injunction, granted in December 2017 and lifted earlier this month, ordered the closure of the two competing casinos, Star Paradise and Paramax. Donaco is seeking damages of US$120 million.
Donaco Chairman Stuart McGregor said Paramax was owned by two of the vendor’s sons until August 2018, after which ownership was “transferred to a person in Thailand. Star Paradise changed its name to Winsor and continues to operate.” The company contends that Somboon Sukcharoenkraisri and sons Lee Bug Huy and Lee Bug Tong continued to run gaming operations at Star Paradise next to Star Vegas despite the non-compete.
