Donaco to issue new shares to raise $132M for Poipet casino

Donaco International said it will issue new shares to raise $132 million to part-fund the company’s recently announced acquisition of a Cambodian casino.

The company will issue more than 220 million new shares under the entitlement offer to go towards the $360 million Star Vegas Resort and Club in Poipet. The company also said it will borrow  $100 million from a bank to fund the venture.

“If the Acquisition does not complete for any reason, net proceeds of the Entitlement Offer will be used for working capital purposes of the company and to repay existing debt,” said Donaco chairman Stuart McGregor.

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.

“Shareholders will receive significant benefits from an increase in size and scale of the company and diversification of our revenue stream,” Donaco managing director Joey Lim said earlier in the week.

Donaco last year opened its redeveloped luxury casino resort in northern Vietnam.

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