Donaco International Ltd. has reached a “pragmatic and fair settlement” with a group of Thai vendors who own the property where its flagship Star Vegas casino is located.
The deal has concluded all legal conflicts between the parties and led Donaco to renew its Star Vegas lease for 95 years. Donaco will pay the vendors $20,000 a month for the first five years, and $30,000 a month for the five years that follow. The rent will then increase by 3 percent every three years, reported Inside Asian Gaming. Donaco will also pay 25 percent of any Star Vegas EBITDA in excess of $16 million for the next five years.
As part of the settlement, Donaco will receive $38 million from the lessors as part of what the casino firm’s chairman Mel Ashton called the end of a “long-running dispute.”
The Thai vendors, identified as Somboon Sukcharoenkraisri, Lee Bug Tong, Lee Bug Huy, Lee Hoe Property Co. and Ltd. and Paramax Co. may continue running gaming operations at Star Paradise, the competing casino at the heart of the dispute. They built the property next door to Star Vegas in 2016.
Donaco said it chose to settle the matter rather than risk having its Star Vegas lease terminated.
“The settlement reached provides certainty of tenure for the Star Vegas business and will conclude all disputes between the parties,” Donaco said. “It will also allow the company and management to now focus on the forward momentum of the profitable Star Vegas business, and continued improvements to the company’s balance sheet and financial position.”
The agreement restricts the vendors from selling their 17.99 percent stake in Donaco for at least six months. In addition to Star Vegas, Donaco operates the Aristo International Hotel and its associated casino at Lao Cai, on Vietnam’s border with China.
