Corporate: Donaco settles legal case over Cambodian casino
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Casino operator Donaco International (ASX:DNA) can now put its legal woes over its Star Vegas casino behind it.
The company’s casino, in the town of Paôy Pêt — right on Cambodia’s border with Thailand, was leased on the basis that the vendors would not run gaming operations in Poipet.
Donaco alleged the vendors had defied the non-compete clause and sought up to $US190m in damages.
But the company reached a settlement that it said was pragmatic and fair. Donaco has security of tenure over Star Vegas for the next 90 years.
Although the non-competition clauses will be removed from its contract, Donaco will receive $US38m in compensation. However, it will have to pay $US18m to settle claims made for unpaid management fees.
This settlement retires over 80 per cent of Donaco’s net current liabilities and preserves the Star Vegas business.
“This give us the stable platform we need to press forward on our other priorities for shareholders,” chairman Mel Ashton said.
Ashton said these priorities included improving Donaco’s financial position, weathering the impacts of the coronavirus and offering stability to third party vendors.
Shares jumped nearly 24 per cent to an intra-day peak of 8.3c this morning.
Investment partner Joyce Corporation (ASX:JYC) announced this morning it was selling 10 per cent of auctioneer Lloyd’s direct to its local management team. Joyce bought a 51 per cent stake of Lloyd’s in July 2016 but is now selling $1.45m worth of its stake. It also said it had received interest in purchasing the 46 per cent it still owns.
Chairman Mike Gurry said the sale would free up cash for the company and since its partnership began, Lloyd’s had tripled in size. Shares in Joyce rose over 20 per cent this morning.