Indochina’s boutique Australian-listed casino operator Donaco International says it is seeking consent from Mega International Commercial Bank Inc so that Donaco can “fulfill part of the payment agreement” agreed with the Thai supplier of Star Vegas Resort & Club properties (pictured).
The agreement was announced earlier this month. As part of the deal, Donaco agreed to remove non-competitive and non-graft provisions related to its Star Vegas business and receive $38 million from the supplier side in return.
“To date, the parties to the settlement have submitted requests to the relevant courts and authorities to withdraw,” the company said in a recent filing with the Australian Stock Exchange, referring to outstanding legal and arbitration issues between Donaco and its Thai suppliers.
The company added that it is awaiting court judgment and confirmation from authorities to meet the terms set out in the settlement agreement.
The agreement with Thai merchants stated that Donaco would have to pay US$18 million to settle the counterparty’s claim for unpaid administrative expenses. In addition, as part of the transaction, Donaco would provide “unpaid rent” and an additional US$20 million in rent to the company’s property corporation.
In the filing, Donaco said that under the facility agreement with Megabank, the company must obtain consent from the lender to fulfill part of the settlement agreement. That includes paying outstanding rent and US$20 million to the company’s board property and removing non-competitive provisions from the share sale agreement.
“We are confident that Megabank will support the agreement reached with Thai vendors and the continuation of Star Vegas casinos,” the company said.
The casino operator announced last week that it was closing “most” of its Star Vegas hotels. The announcement did not elaborate on the impact of the move on the property’s gaming operations.
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