The turbulent run of Southeast Asian casino operator Donaco International on the Australian Securities Exchange (ASX) is coming to an end. The company is
The turbulent run of Southeast Asian casino operator Donaco International on the Australian Securities Exchange (ASX) is coming to an end. The company is being taken private after shareholders voted almost unanimously to accept a takeover offer from On Nut Road (ONR), an investment vehicle controlled by the Hong Kong-based fund Argyle Street Management.
The AU$0.045-per-share cash offer, which represented a 50% premium to Donaco’s undisturbed share price, secured the backing of 98.11% of investors. Following the vote, the Supreme Court of New South Wales approved the scheme of arrangement, clearing the final hurdle for the acquisition. Argyle Street Management, a specialist in distressed Asian assets, has been an investor in Donaco since 2019 and already held a 12.84% stake.
Donaco’s decision to sell was forced by a severe and worsening situation at its flagship property, the DNA Star Vegas casino in Poipet, Cambodia. The property, which is heavily reliant on customers crossing the border from Thailand, has been crippled by a “double blow” of geopolitical and regulatory pressures.
First, escalating political tensions between Cambodia and Thailand have led to the closure of key border crossings, choking off the casino’s primary source of customers. Second, Cambodia’s new commercial gambling law, introduced in 2020, has significantly increased compliance costs and regulatory scrutiny on smaller operators as the country seeks to attract large-scale integrated resorts. This hostile operating environment led to a 62% year-on-year collapse in traffic at Star Vegas in June and a 57% plunge in group EBITDA for the second quarter.
The company’s non-executive chairman, Porntat Amatavivadhana, said the board’s decision was driven by “a combination of financial headwinds, limited profit margins and a lack of substantial investor confidence.”
He made it clear that the company’s position on the public market was no longer tenable, adding that “fundraising efforts for any form of growth have been particularly challenging.” The sale was therefore presented as a necessary step to provide value to shareholders in the face of insurmountable operational challenges.
Trading in Donaco shares on the ASX was suspended at the close of business on 8 August. The company will be formally delisted shortly. Shareholders who were on the register as of 12 August will receive their cash payout for the sale on 19 August, bringing an end to the company’s difficult tenure as a publicly listed entity.
