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Donaco to buy Cambodia’s Star Vegas casino for $360m

Australia-listed Donaco International said it agreed to buy the Star Vegas Resort & Club in Poipet, Cambodia for $360 million.

The casino is on the Thai border and caters mainly to Thai nationals. Donaco expects the transaction to diversify its business and provide economies of scale. It says the acquisition, due to be completed in April, will immediately boost earnings.

Donaco, which last year opened its redeveloped luxury casino resort in northern Vietnam, announced in late 2014 that it was in talks for a significant acquisition in Cambodia. 

The purchase of Star Vegas will be financed through the issue of 147 million Donaco shares to the vendor, $40 million cash on hand, bank debt and an issue of equity worth $100 million to existing shareholders.

“Star Vegas is a well-established and highly successful business with an enviable market position and excellent growth prospects,” Donaco managing director Joey Lim said. “Shareholders will receive significant benefits from an increase in size and scale of the company and diversification of our revenue stream,” he said, adding Donaco had never intended to be a single property business.

In a presentation to investors, Donaco said Star was expected to have generated $60.5 million in EBITDA in 2014. 

The Star resort was established in 1999 and comprises of four hotels, with 385 rooms in total. It has a sports bar with a wagering license as well as numerous restaurants and shops.

The casino averages about 5,000 visitors a day and has 109 tables, mainly for baccarat. It has 1,264 electronic gaming tables, 288 of which are owned outright. The minimum VIP bet size is A$350. 

Donaco says the addition of Star will boost revenue by 480 percent and EBITDA by 300 percent.

Cambodia has about 50 licensed casinos, with the majority along the Thai border. The biggest in the country is NagaCorp’s NagaWorld property in the capital Phnom Penh. Visitor numbers to Cambodia grew at a compound average rate of 18 percent from 2000, to 2013, with Chinese arrivals increasing 19 percent in the first half of 2014.


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