Transaction and Trading Update
Sydney, June 23, 2015 AEST (ABN Newswire) - Donaco International Limited (
ASX:DNA) is pleased to confirm that its acquisition of the business of the Star Vegas Resort & Club in Poipet, Cambodia (the Transaction) is on track for completion on 1 July 2015.
Execution of Binding Loan Agreements
The Company has signed binding long-form agreements for its USD100 million loan facility with Mega International Commercial Bank Co, Ltd of Taiwan (Mega Bank). The long-form agreements implement the terms of the binding Commitment Letter executed by the parties in March 2015.
The key elements of the loan package are as set out in the Shareholder Booklet for the Extraordinary General Meeting held on 27 March 2015.
Conditions Precedent
Due diligence has been successfully completed. All conditions precedent for the execution of the loan agreements have been satisfied. The remaining conditions precedent for the completion of the Transaction are expected to be satisfied by 1 July 2015.
Completion Arrangements
If all conditions precedent are satisfied, completion of the Transaction will take place on 1 July. The Company will obtain ownership and control of the Star Vegas business on and from that date.
The Company will then pay to the vendors USD135 million in cash, which is additional to the deposit of USD5 million paid in February 2015. The Company will also issue 147,199,529 ordinary shares to the vendors (or their nominees), with an agreed value of USD120 million.
The remaining USD100 million will initially be placed in escrow, until Mega Bank registers its security documentation in Cambodia. Once that is done, the funds will be released to the vendors. This is expected to occur by late July 2015.
Working Capital Facility
The Company also intends to sign agreements for a working capital facility, providing debt funding in the amount of USD20 million. This will be used to support the working capital needs of the expanded casino operations in Cambodia and Vietnam.
It is expected that the facility will be unsecured, other than via a guarantee from the Company. It will require repayments of interest only, on a quarterly basis, with the principal repayable in full within 39 months of drawdown. Early repayment will be permitted, subject to a minimum interest charge period of 12 months. The interest rate will be 10%.
Trading Update - Aristo International Hotel
The Company's casino operations in Vietnam have experienced positive and improving conditions in the past four months. Casino visitation continues to grow, reaching a new monthly record high of 10,254 players in May 2015. This is 19% higher than the previous monthly record, set in April 2015.
Hotel occupancy also reached a new record high of 75%, with the average revenue per occupied room remaining at USD62 per night.
Gaming turnover was also robust in May, totaling USD207 million. The win rate on VIP table games has continued to be volatile, reaching 1.29% in May, compared to the theoretical rate of 2.85%. This matter is being carefully monitored and reviewed by the Board and management.
As a result of the positive and improving conditions, the Aristo has seen a need to increase the size of its workforce, in order to handle the increased business volume. The Company is currently seeking to recruit 60 new staff members at the Aristo, in positions including dealers and VIP hosts.
About Donaco International Ltd
Donaco International Limited (ASX:DNA) operates leisure, entertainment and associated technology businesses across the Asia Pacific region.
Donaco's largest business is the Star Vegas Resort & Club, a successful casino and hotel complex in Poipet, Cambodia, on the border with Thailand. Star Vegas was established in 1999, and is the largest and highest quality of the Poipet casino hotels. The property has more than 100 gaming tables, more than 1400 slot machines, and 385 hotel rooms.
Donaco's flagship business is the Aristo International Hotel, a successful boutique casino in northern Vietnam, located on the border with Yunnan Province, China. Established in 2002, the property has recently been expanded to a brand new five star resort complex with 400 hotel rooms. Donaco is a pioneer casino operator in Vietnam, and owns a 95% interest in the business, in a joint venture with the Government of Vietnam.
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