- Casino and hotel company, Donaco International (DNA) has welcomed the deferral of a payment owed to its principal lender
- The company was due to pay US$5.5 million (approximately A$7.32 million) to the Mega International Commercial Bank by June 15, 2020
- Donaco has had the principal payment and all covenants for June 2020 waived until December 31, 2020
- The COVID-19 pandemic has seriously impacted the company, by restricting travel and reducing patronage at casinos and hotels
- Donaco International shares are grey at market open, trading for 4.8 cents each
Casino and hotel company, Donaco International (DNA) has welcomed the deferral of a payment owed to its principal lender.
The company’s main lender is the Mega International Commercial Bank Company (Mega Bank). Donaco owed the lender US$5.5 million (approximately A$7.32 million), by June 15, 2020.
However, Mega Bank has agreed to defer the principal payment until December 31, 2020. The lender also agreed to waive all the Facility Agreement’s covenants for June 2020 until the same date.
This includes the financial covenant about the Donaco Hong Kong 2020 Interest Coverage Ratio and Debt to EBITDA. It also includes the covenant that Donaco’s aggregate amount of cash and cash equivalent investments should stay above A$20 million after June 30, 2020.
In its announcement, the company expressed gratitude for the financial respite during a period of widespread hardship. The COVID-19 pandemic has seriously impacted the company through its casino and hotel businesses.
“Donaco welcomes this support from Mega Bank, and extends thanks for the consideration given in supporting Donaco.
“The company continues to be impacted by COVID-19 related travel restrictions and subsequent reduced patronage at Star Vegas and Aristo,” the announcement said.
Donaco is continuing to consider options which would allow the company to survive the current economic uncertainty. These possible options include liquidity measures and sources of capital injection which will keep the business sustainable and dynamic.
However, Donaco must first pay off its debts. The company has agreed that proceeds of any capital injection before December 31, 2020, will go towards settling the principal payment owed.
Donaco International shares are grey at market open, trading for 4.8 cents each at 10:44 am AEST.