The Donaco International Ltd (ASX: DNA) share price is up 84% to 6.8 cents today, although the bad news is that shares in the South East Asia focused casino operator are still down 80% from 35 cents at the start of 2018.
Donaco shares even hit a high of $1.48 back in 2014, but it's been all downhill since then as the group reported a number of operating problems at its two key casinos and resorts – they're the Star Vegas Casino in Cambodia and the Aristo Casino in northern Vietnam on the border with China.
At its November 29 AGM Donaco's management reported that the vendor of the Star Vegas casino was in breach of a 'non compete" clause in the sale contract. It also claimed the vendor was poaching VIP junkets away from the Star and is now in a court battle to force the vendor to obey the sale contract.
Another unusual operating problem is that Donaco reported Chinese criminal gangs have been putting off VIP punters from taking a chance at its Aristo Casino in Vietnam, which relies heavily on VIP players crossing the border from China to gamble.
Finally, the group also has US$39.9 million in debt secured against the assets of the Star business, with it reporting EBITDA of $5.2 million for the first 4 months of 2019.
Its board is currently undertaking a strategic review to consider how best to manage or eliminate the outstanding bank debt.
