Donaco defers settlement payment until bank consent

Australia-listed Donaco International on Friday said that the payments relating to its settlement with its former Thai vendors for the Star Vegas casino in Poipet has been deferred while they wait for consent from the bank. 

In early March, Donaco announced it had settled its long-running legal dispute with its former Thai vendors for the Star Vegas casino in Poipet, including the proceedings in Singapore, Australia, Thailand, and Cambodia.

Under the settlement agreement, which was announced on March 26, Donaco would receive US$38 million, payable by its Thai vendors in order to remove non-competition clauses in the Share Sale Agreement. 

In return, Donaco would pay $18 million in unpaid management fees plus interest, along with $20 million to Lee Hoe Property.

However, for these payments to go ahead, Donaco would require the consent of Mega International Commercial Bank Co Ltd, the bank which it holds a Facility Agreement with. 

According to the latest filing from Donaco, the company has come to an agreement with its settlement parties to defer these payments until consent is given by Mega Bank. 

Commenting on the settlement progress, chairman Mel Ashton said: “We are pleased to have reached a variation with DNA Star Vegas Co and Donaco Hong Kong that provides more certainty around settlement while we continue to pursue the required consents from Mega Bank. Settlement payments will be withheld until consent from Mega Bank is received and will be subsequently offset at such time.”