Donaco International Ltd has announced plans to raise AU$14.4 million in equity by way of a fully underwritten pro rata non-entitlement offer.
The offer, which will make available one new share for every two existing shares, is being underwritten by the Thai vendors of Donaco’s Star Vegas casino in Poipet, Lee Bug Huy and Lee Bug Tong, who hold a 17.99% stake in the company. Ironically, it was only a few months ago that Donaco was involved in a series of legal battles with Huy and Tong before recently reaching a settlement following a series of changes to the board.
In a Friday filing, Donaco said the new board “has determined that the company is in urgent need of capital as a result of the impact of COVID-19 on the company’s gaming operations and the requirement to make repayments under the company’s debt facilities with Mega Bank.”
It added that a variety of other funding options had also been considered but that none were deemed appropriate given the current status of the company’s borrowing with covenant waivers being required.
“In the circumstances, the company has decided to proceed with the entitlement offer providing eligible shareholders with an opportunity to invest in the company while steering funding certainty by having the entitlement offer fully underwritten by the underwriters.”
As part of the fund raising plan, Chairman Mel Ashton and non-executive director Simon Vertullo will step down from the board following completion of the offer, with Huy and Mr Paul Amatavivadhana to replace them.
Donaco’s latest fund raising venture comes as Cambodia announced Friday that all casinos would be allowed to resume operations pending approval of each property’s COVID-19 prevention plans.
Star Vegas has been closed since late March due to COVID-19, while the company’s Vietnam casino, Aristo International, reopened in May with limited operations.