GGRAsia – A 27 pct holding in Donaco leaves Lim family hands

A 27 pct holding in Donaco leaves Lim family hands

Mar 04, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck

Shares amounting to a 27.25-percent holding in boutique Asian casino operator Donaco International Ltd, and that were previously controlled by members of the Lim family, the Malaysian business dynasty that founded Genting Bhd, are now in the hands of others, according to paperwork lodged with the Australian Securities Exchange (ASX).

Donaco said in a Monday filing that it had become aware of the move, and that it might be considered by Taiwan’s Mega International Commercial Bank Co Ltd – a lender to Donaco – as a “change of control” under the terms of a loan agreement.

“If so, the loan may become due and payable sooner than the currently scheduled repayment dates,” stated Donaco in the Monday update to the bourse.

Donaco added: “The company will discuss this issue with Mega Bank, and keep the market informed of all developments.” The company runs a casino on Cambodia’s border with Thailand; and one on Vietnam’s border with China – in both cases taking advantage of the neighbouring jurisdictions’ domestic ban on casinos.

In mid-December Donaco had told the ASX it was considering what to do about a US$39.9-million debt to Mega Bank, secured against the assets of its Star Vegas Resort and Club (pictured) in Poipet, Cambodia.

The Monday filing said Vincent Pirina and Mitchell Mansfield had been appointed as “joint and several receivers of approximately 224 million shares” in Donaco; stock “formerly controlled by the Lim family”.

That document said the appointment of receivers was made by Madison Pacific Trust Ltd, as security trustee for OL Master (Singapore Fund 1) Pte. Ltd, “pursuant to certain financing agreements with entities controlled by Mr Joey Lim”.

In December Donaco announced its managing director and chief executive, Joey Lim Keong Yew, a scion of the Lim family, was taking three months of leave for health and other reasons. His brother, Ben Lim Keong Hoe, a non-executive director, was taking his place.

No change to daily ops

Donaco noted on Monday: “The appointment of receivers over these shares has no impact on the management or operations of the company. The board has agreed that Mr Ben Lim will remain as interim managing director and CEO until the end of March 2019.”

On Thursday Donaco announced it had narrowed its fiscal first-half loss, but blamed its interim AUD36.8-million (US$26.1-million) deficit on an impairment charge related to its casino operations in Cambodia.

Donaco had stated previously that the impairment of the Star Vegas business was “a direct result” of “breaches of agreement” it blamed on a Thai former business partner. The Australia-listed firm has claimed that this former business partner was still operating the Star Paradise casino – located near Donaco’s Star Vegas property – even after a deal for Donaco to run Star Paradise expired and was not renewed.

Donaco said it had obtained an injunction to prevent the former business partner from terminating the 50-year lease of the land on which the Star Vegas casino is located, with the matter going to arbitration in Cambodia.

In a Friday filing following up on that topic, Donaco had confirmed the lease dispute with the Thai vendor had been heard and concluded at an arbitration hearing in Cambodia the previous day.

Donaco added: “The rules of the National Commercial Arbitration Centre in Cambodia provide that an award should generally be made within 75 calendar days of the conclusion of the hearing.”

The casino firm added: “Donaco will keep the market fully informed of all material developments.”