Directors have decided capital is urgently needed to cope with the impact of Covid-19 and travel restrictions on gaming revenue.
Australia.- Casino and club operator Donaco International Limited has announced it will raise its equity to seek around AU$14.41 million (US$9.9 million) in working capital.
The recent US$5 million loan deferral from its largest lender, Mega International Commercial Bank, from March to December was not enough to rescue the operator’s balance sheet.
Donaco’s directors determined the firm was “in urgent need of capital as a result of the impact of COVID-19” on gaming revenues, and that an entitlement offer was needed.
Non-Executive Chairman Mel Ashton said: “The funding aligned with Donaco’s key objectives of limiting debt, preserving shareholder value and providing immediate financial stability for the company.
“COVID-19 travel restrictions, the consequent closing of international borders, and the closure of casinos in Vietnam and Cambodia (with the casino in Vietnam now partially operational), has significantly impacted the financial position of the company. This capital injection will enable us to stabilise our immediate financial needs, and meet the upcoming repayment requirements on our borrowings.”
The entitlement offer at a price of $0.035 per new share is fully underwritten by Lee Bug Huy and Lee Bug Tong, who own almost 18 per cent of the company’s shares.
Once underwriting is complete, Lee Bug Huy and Paul Porntat Amatavivadhana will be appointed as non-executive directors. Mel Ashton and Simon Vertullo plan to retire from their positions.
The company has said it is currently looking new additional directors to complete the board.