Casino operator Donaco settles its issues
Tuesday 12th January 2021
The company, which operates a casino in northern Vietnam and one in Cambodia, has been in a multi-year legal tussle with the Thai vendors of the Star Vegas casino in Poipet (pictured).
In a note to the Australian Stock Exchange, Donaco said the dispute has been formally concluded and its half-year results up to December 31 will fully reflect the positive outcome.
"In addition, the business has continued to improve to a positive EBITDA as impacts from Covid-19 have moderated from the earlier extreme levels," it said. "The company's debt has been reduced significantly and a solid platform for growth is now emerging."
It's been a long and convoluted saga that has involved a revolving door of executives and the installation of former vendor, Lee Bug Huy, as CEO at the company last year.
Donaco bought the casino for $360m in January, 2015 to target wealthy Thai clientele across the border. At the time, the company called the purchase of the 385-room resort a "transformational" move.
However, it soon ran into difficulties, accusing the vendors of violating non-compete clauses by setting up a new casino in the vicinity.
Now the legal issues are settled, the company said it's looking to build on recent gains. During the Covid-19 crisis, Donaco took the opportunity to adjust service provider agreements to cut costs and reorganise its accords with junket operators.