Aussie Casino Company Donaco Gets Done Over in Cambodia

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Aussie Casino Company Donaco Gets Done Over in Cambodia

Post by CEOCambodiaNews » Sat Jan 12, 2019 8:15 am

How Aussie casino company's $400m punt on Asia came unstuck
By Lucy Battersby & Nick Toscano
12 January 2019 — 12:00am
The closest legal gaming tables to Bangkok are a four-hour drive east, down a highway that leads to the Thai-Cambodian border. Just over the border is the frontier town of Poipet, a one-time war zone now in the midst of a gambling gold rush, with new casinos and hotels rising high above the streets.

Here in Cambodia’s “wild west”, certain businesses have discovered that catering to Thai gamblers is a decidedly lucrative line of work. Gambling is banned in Thailand, but the drive to Poipet is smooth and comfortable.

Local and foreign gambling companies, including one little-known Australian outfit, Donaco International, are betting Poipet will keep growing in popularity.

Just over three years ago, the ASX-listed Donaco placed a hefty bet on the border town, acquiring Poipet’s biggest casino, the Star Vegas, for US$360 million.

“There’s a whole strip of casinos, about 10 casinos, all servicing the Thai market,” says Ben Reichel, Donaco’s executive director. “Our property is the largest, best-quality casino there – 100 gaming tables, 1200 slot machines ... it’s probably the same size as The Star casino in Sydney.”

Wherever you go in the world, casinos are a risky business; both for the punters who walk through the doors and dream of going home with full pockets, and for the owners who spend top dollar to create the most luxurious settings, and whose fortunes can swing dramatically on a handful of lucky – or unlucky – winning streaks.

But with a groundswell of new casino licences and an absence of any government regulation on how they operate, casinos in Cambodia are probably as dicey as they get.

“If you operate in Cambodia, you operate at your own risk,” says Peter Cohen, a prominent gaming industry advisor and former regulator who is now with the Agenda Group and helped draft Cambodia's yet-to-be-introduced casino laws. “You are competing with other operators who may not necessarily be fair.”

The past 18 months have certainly been tough for shareholders in Donaco which listed on the Australian Securities Exchange in 2013.
Image
Less than a year ago, it had a market value of $290 million. Late on Friday afternoon, it was worth $51 million, at a share price of just 6.3 cents.
https://www.smh.com.au/business/compani ... 50qqk.html
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Duncan
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Re: Aussie Casino Company Donaco Gets Done Over in Cambodia

Post by Duncan » Sat Jan 12, 2019 9:10 am

Which goes to show if you get in to gambling you could lose money no matter which side your on.
Cambodia,,,, Don't fall in love with her.
Like the spoilt child she is, she will not be happy till she destroys herself from within and breaks your heart.
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Re: Aussie Casino Company Donaco Gets Done Over in Cambodia

Post by davegorman » Sat Jan 12, 2019 10:11 am

“At its November 29 AGM Donaco’s management reported that the vendor of the Star Vegas casino was in breach of a ‘non compete” clause in the sale contract. It also claimed the vendor was poaching VIP junkets away from the Star and is now in a court battle to force the vendor to obey the sale contract.

Another unusual operating problem is that Donaco reported Chinese criminal gangs have been putting off VIP punters from taking a chance at its Aristo Casino in Vietnam, which relies heavily on VIP players crossing the border from China to gamble.

Finally, the group also has US$39.9 million in debt secured against the assets of the Star business, with it reporting EBITDA of $5.2 million for the first 4 months of 2019.

Its board is currently undertaking a strategic review to consider how best to manage or eliminate the outstanding bank debt.”

https://au.finance.yahoo.com/news/why-d ... 50294.html

Sounds like mismanagement or just in over their heads. Other foreign operators are all doing jolly well in Asia.
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Re: Aussie Casino Company Donaco Gets Done Over in Cambodia

Post by CEOCambodiaNews » Sat Jun 01, 2019 6:08 pm

Jun 1, 2019, 12:05am
Donaco's Casino Gamble In Cambodia Gets Messier, Yet Still Pays Off
Muhammad Cohen

Australia-listed Donaco International, owner of border casinos in Cambodia and Vietnam, remains immersed in legal proceedings with its biggest individual shareholder, who doubles as its top competitor. Donaco shares traded over A$1.50 in March 2014 (then US$1.37) and near A$0.70 when it acquired its main asset, Star Vegas in Poipet, but currently languish below A$0.10 (now US$0.07). Australian regulators have seized shares that Donaco’s biggest institutional shareholder, Orchard Capital Partners Asia, didn’t obtain through a loan default by Joey Lim, who cofounded Donaco with his grandfather, Genting Group founder Lim Goh Tong. The elder Lim envisioned Donaco taking on projects that were too small for Genting, but probably never expected a deal this complicated.

In 2002, grandfather and grandson selected Lao Cai, on Vietnam’s border with China’s Yunnan Province as the site for a small casino hotel. Lim Goh Tong passed away in 2007 at age 90, and Joey Lim carried on, listing Donaco on the ASX by reverse takeover in 2013. In November 2014, Donaco completed five-star Aristo International to replace the original Lao Cai property, and in January 2015 signed a deal to acquire Star Vegas, the largest casino in Poipet, the gambling enclave closest to Bangkok. Poipet has a rough and tumble reputation, but its gross gaming revenue approaches US$500 million in good years. Owning Poipet’s crown jewel made Donaco a regional gaming player, Lim believed, even a contender for Japan.

Donaco paid serious money for Star Vegas, US$360 million to owner Somboon Sukjaroenkraisri, a Thai businessman and politician. But Somboon agreed to manage the casino for two years, guaranteeing US$60 million annual Ebitda. Donaco shares also accounted for US$120 million of the payment, giving Somboon 18% of the company. Lim’s loan that cost him his 27.25% Donaco stake traces to the rights issue for Somboon’s shares.

Dilution, failure to reach an agreement to extend Somboon’s management deal and his apparent desire to remain a casino operator led to Somboon allegedly operating two casinos up the road from Star Vegas, devastating its Thai VIP business. Donaco, which has upgraded Star Vegas guest rooms and its gaming floor, claims the casinos violate the non-compete clause in the sale agreement. The parties are in arbitration in Singapore plus litigation in Australia, Cambodia and Thailand. Meanwhile, Star Vegas keeps making money in a Poipet market posed to grow with Thailand completing royal succession and elections as transport links improve.
Full article: https://www.forbes.com/sites/muhammadco ... f0c6de5b7c
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Re: Aussie Casino Company Donaco Gets Done Over in Cambodia

Post by markd » Sat Jun 08, 2019 3:45 pm

classic los business deal

1. sell thriving business for top dollar

2. steal all the clients away

3. buy back near death business for bottom dollar

4. repeat
thru shit to more shit
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Re: Aussie Casino Company Donaco Gets Done Over in Cambodia

Post by SternAAlbifrons » Sat Jun 08, 2019 4:37 pm

Business plan
Form a dodgy casino company to do business with a mafia casino company in a wild west border town located in a country with no effective business law.
Then float it on the Australian stock exchange for a few hundred mill.
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Re: Aussie Casino Company Donaco Gets Done Over in Cambodia

Post by Anchor Moy » Sat Jun 08, 2019 4:58 pm

SternAAlbifrons wrote:
Sat Jun 08, 2019 4:37 pm
Business plan
Form a dodgy casino company to do business with a mafia casino company in a wild west border town located in a country with no effective business law.
Then float it on the Australian stock exchange for a few hundred mill.
Sounds like a plan. :bow:
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Re: Aussie Casino Company Donaco Gets Done Over in Cambodia

Post by angsta » Sat Jun 08, 2019 5:39 pm

markd wrote:
Sat Jun 08, 2019 3:45 pm
classic los business deal

1. sell thriving business for top dollar

2. steal all the clients away

3. buy back near death business for bottom dollar

4. repeat
I thought this business model only worked on bars an restaurants. Apparently not. Classic.
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