GGRAsia – Donaco main lender okays delay in US$5mln payment

Donaco main lender okays delay in US$5mln payment

Jun 16, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck

The principal lender to Australia-listed casino operator Donaco International Ltd has agreed to a six-month deferral of a US$5-million payment.

Donaco said in a filing on Monday to the Australian Securities Exchange that principal lender Mega International Commercial Bank Co Ltd, had “agreed to the deferral” of a US$5-million principal payment to December 31. The payment was due on Monday (June 15), as stated under a facility agreement originally established in August 2017 between Donaco and the bank, and later amended.

“Mega Bank has also granted a waiver on all June 2020 covenants under the facility agreement, until December 31, 2020,” Donaco said. That covered the requirement for “the aggregate amount of cash and cash equivalents investments of the Donaco group to be not be less than AUD20 million” (US$13.9 million) at any time “on or after June 30”.

Donaco runs casino hotel properties in Indochina: Star Vegas Resort and Club (pictured in file photo) at Poipet on Cambodia’s border with Thailand; and Aristo International Hotel and its associated casino at Lao Cai on Vietnam’s border with China.

Donaco said in its latest filing that business continues “to be impacted by Covid-19-related travel restrictions and subsequent reduced patronage at Star Vegas and Aristo”.

The firm said it would continue “to consider liquidity measures and sources of a capital injection to guarantee the business remains in a sustainable and dynamic position during this period of global uncertainty”. Donaco stated that the payment-deferral agreement reached with Mega Bank provided that “the proceeds of any capital injection prior to December 31, 2020 should be used to settle the US$5-million principal payment when received”.

Donaco announced earlier this month that its outgoing chief executive, Paul Arbuckle, would remain in post on a “month-to-month” basis beyond his planned June departure, in order to help the firm make a “smooth transition to a new CEO”.

“Under the executive search process, the board has interviewed a number of quality candidates for the CEO position that are currently under consideration and is seeking to make an appointment as soon as possible,” Donaco stated at the time.