Donaco says cash reserves enough for year-long casino closures - IAG
Tuesday 7th April 2020
Southeast Asian casino operator Donaco International Limited says it has enough cash on hand to survive for more than a year on estimated cash burn of up to US$900,000 per month following the closure of its casinos in Cambodia and Vietnam due to the COVID-19 pandemic.
In a business update, Donaco revealed on Tuesday that it currently has a cash balance of US$11.6 million, while the cost of maintaining casino assets and covering associated corporate costs is estimated at between US$800,000 to US$900,000.
The company has also flagged the possibility of seeking new sources of capital injection in order to ensure the business remains in a "sustainable and dynamic position."
"The duration of the COVID-19 crisis and the period of closure of the casinos will obviously affect the requirement for a capital injection but in any case the board is confident of both the ability to maintain the business during an extended period of closures and source capital as required to strengthen the balance sheet," Donaco said.
Meanwhile, the closure of both its Star Vegas casino in Poipet, Cambodia and Aristo International Hotel in Vietnam has seen the company forced to reduce its headcount by placing employees on leave, standing down casual staff and deferring non-essential expenditure.
"The situation we are facing with the COVID-19 pandemic is unprecedented and we've unfortunately had to take some drastic measures with our staff, including redundancies and pay cuts," said Donaco Chairman Mel Ashton.
"This is to ultimately ensure the business remains afloat and to be in a healthy financial position once we eventually rebuild the team and restart operations.
"We will continue to monitor developments and will provide further updates in due course once measures underway are further progressed."