Australian-listed casino operator Donaco International says it has issued a cease and desist letter to the Thai vendor of Star Paradise – located adjacent to Donaco’s Star Vegas in Poipet, Cambodia – for continuing to run gaming operations in defiance of non-compete provisions.
Under the terms of the non-compete provisions, the vendor is not allowed to be involved in any other casino or gaming business in the Poipet area but had previously been granted permission to host gaming facilities under the management of Donaco in a deal that saw the latter paid a monthly management fee of THB 5 million (US$151,000).
That agreement has since expired with no new management arrangements put in place.
In a business update released on Monday, Donaco said it has “now formally notified the Thai vendor that the Star Paradise gaming room cannot operate without Donaco’s consent.
“Otherwise, Donaco considers that this would be a breach of the non-compete provisions that were agreed by the Thai vendor at the time of the purchase of Star Vegas. The non-compete provisions are not limited in time and prevent the Thai vendor from being involved in any other casino or gaming business in the Poipet area,” the company said.
“Currently the gaming room at Star Paradise continues to operate. Accordingly, Donaco has issued a cease and desist letter and will not hesitate to commence legal proceedings to enforce its rights under the non-compete provisions, should this become necessary.”
Meanwhile, Donaco said its new junket facilities will begin operations in October, including 12 online gaming tables to be operated by third party junkets.
“This will represent the first time that the online gaming license at Star Vegas has been used,” it said.
“Both the new entertainment facilities and the online gaming area are expected to commence operations within the next month. This will enable Donaco and Vivo Tower to accelerate the marketing of the property to international junkets.”
In a separate filing to the Australian Securities Exchange, Donaco announced that Managing Director Joey Lim has sold 37.5 million shares in the company for an aggregate consideration of AU$15 million for “private and family reasons.”
Explaining the sale, Mr Lim said, “I firmly believe that Donaco’s shares are undervalued at current prices, but due to the timing of these circumstances, there was no alternative but to sell shares at this time. I continue to have a very positive view on the prospects for the company and my family and I continue to own more than 230 million shares, representing more than 27% of the stock. No further sales by the family are foreseeable at this time.
“There was strong demand for the shares from both international and domestic institutions. I believe that the increased liquidity in the company’s stock will be beneficial for investors and for the company.”
RelatedPosts
