Southeast Asian casino operator Donaco International Ltd has been granted a deferral on a US$5 million principal payment due this month as well as a waiver on all covenants under its facility agreement until the end of 2020 by its main lender, Mega International Commercial Bank Co., Ltd.
According to a Monday filing, the deferral relates to a US$5 million payment due on 15 June 2020, which has now been deferred until 31 December. The waiver on covenants includes amendments to a previous provision stipulating that the group’s aggregate amount of cash and cash equivalents not fall below AU$20 million (US$13.6 million) at any time on or after 30 June 2020.
However, under the terms of the agreement reached with Mega Bank, Donaco must use the proceeds from any capital injection prior to 31 December 2020 to settle the US$5 million principal payment when received.
“Donaco continues 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,” it said.
Donaco’s announcement didn’t specify whether it had yet gained consent to proceed with a settlement deal with the Thai vendors and owners of the property upon which its Cambodian casino Star Vegas sits.
Donaco announced in March that it had reached a settlement with the Thai vendors to end all legal proceedings immediately and renew the company’s Star Vegas lease for 95 years.
The settlement aims to bring multiple proceedings to an end including an arbitration claim in Singapore, where Donaco was seeking US$190 million in damages, and a Cambodian court battle over a disputed 50-year land lease deal for Star Vegas, both related to Donaco’s assertion that the vendors continued to run gaming operations in Poipet in defiance of non-compete provisions.
Donaco said at the time it was awaiting the bank’s consent based on provisions in its facility agreement related to the payment of outstanding rent plus AU$20 million to the vendors, and the removal of non-compete clauses.
The company recently resumed limited operations at its Vietnam casino at Aristo International Hotel, but Star Vegas remains suspended following a nationwide closure order issued by Cambodian Prime Minister Hun Sen in early April.