Donaco confirms delay in acquisition process
The company blamed analysis of the change of control provisions and recent holidays in Australia, Vietnam and Cambodia.
Australia.- Donaco International has announced a delay in the timeline for On Nut Road Limited’s (ONR) acquisition of the company’s shares. It had intended to release the scheme booklet on May 6 and to hold the meeting on June 3.
The statement reads: “The delay in meeting the original timeline has arisen as third parties have taken longer than initially forecast to return valuation inputs to the Independent Expert, lengthier than expected analysis of change of control provisions under Cambodian and Vietnamese law, and numerous recent holiday periods across Australia, Vietnam and Cambodia.
“As a result, the Independent Expert has been unable to complete its report (through no fault of the Independent Expert) which has caused follow-on delays to lodgement of the Scheme booklet with the Australian Securities and Investments Commission for their review.”
Cambodian gaming revenue tax position
Separately, Donaco provided updates on tax in Cambodia. The company noted that it pays a 7 per cent contribution on gross gaming revenue (GGR) to the Cambodian Commercial Gambling Management Commission (CGMC) in line with its licence terms but must now pay 10 per cent Value Added Tax (VAT) on GGR from January 1, 2025, following regulatory changes introduced by the Ministry of Economy and Finance under Prakas No. 1080.
The prior administration had deferred commencement of the requirement until at least the end of 2024, prompting some to assume the delay could be indefinite. However, the General Department of Taxation (GDT) has confirmed the new tax is now in effect as of January 1.
The company said legal advice has made it clear that “a liability to pay the new tax on GGR does exist in respect of gaming revenue earned since January 1, notwithstanding that no tax assessment has yet been rendered on Donaco (including in respect of the 10 per cent VAT). Should that liability actually crystallise, Donaco would estimate additional tax payable in the form of 10 per cent VAT for the third quarter of the year would be in the order of AU$666,000 (US$426,246).”
The new 10 per cent VAT does not reduce the existing 7 per cent GGR payment to the CGMC. This situation raises the risk of double taxation, which Donaco and others have discussed with Cambodian authorities. In February, Donaco asked for more time to report VAT, but the GDT declined the request in early April, stating that the company must comply with the new tax laws.
The company said: “Donaco has continued to engage with the GDT and the wider Cambodian Government on the applicability of Prakas No. 1080 and the issue of double taxation between Prakas No. 1080 and the 7 per cent gross gaming revenue tax payable to the CGMC, and at this stage no tax assessment has been received by Donaco Star Vegas in respect of Prakas No.1080. Ultimately, any tax payable would be subject to final Cambodian Government determination.”
For the first half of the financial year, Donaco reported net revenue of AU$21.83m (US$13.6m), up 12 per cent in year-on-year terms, while earnings before interest, taxation, depreciation and amortisation (EBITDA) reached AU$11.39m (US$7.10m), up 17.0 per cent. According to the company, the rise highlights steady growth following stringent financial management and increased traffic from tourism.
Donaco recorded net profit after tax of AU$7.77m (US$4.84m), up 36.32 per cent year-on-year. DNA Star Vegas in Cambodia posted net revenue of AU$14.08m (US$8.77m), up 5.39 per cent year-on-year and EBITDA of AU$8.10m (US$5.05m), up 5.7 per cent. The casino venue reported an average daily visitation of 949 players.
