Donaco Singapore, a firm controlled by two grandsons of the founder of Asia casino empire Genting Berhad, and Australia’s Two Way Ltd are joining forces to take a seat in Vietnam’s gaming business.
The Australian company early this month announced it had signed a share-sale agreement with Donaco Singapore, that would create a new group to focus on gaming and wagering, leisure and hospitality in the Asia-Pacific region.
Under the agreement, Donaco will sell its 75 per cent share in Lao Cai International Hotel in Vietnam to Two Way, in return for 94.8 per cent Two Way shares. The remaining 25 per cent of Lao Cai International Hotel is owned by Sapa Petro Tourism, an entity associated with the government of Vietnam.
Two Way shareholders will be asked to approve the transaction at the annual general meeting on November 22, as well as a change of the company name to Donaco International Limited.
Donaco is a registered Singaporean company, which is involved in gaming, entertainment and trading industries in Singapore, Malaysia, Vietnam, Cambodia and Thailand. Lim Keong Yew and Benjamin Lim Keong Hoe, who are currently controlling Donaco are grandsons of Tan Sri Lim Goh Tong, the founder and former chairman of Genting Berhad. They are said to run Donaco on the same guiding principles and expertise of the Genting group, one of the largest leisure and hospitality operators and developers in Asia.
Meanwhile, Sydney-based Two Way is best known for creating and developing advanced interactive media and gambling applications for mobile, internet, television and internet portal television platforms.
Stuart McGregor, chairman of Two Way, said he looked forward to the new opportunities that would be created by combining Two Way’s online and interactive expertise with the casino and hospitality management skills of Donaco.
“The wagering and hospitality industry is going through significant change across the Asia Pacific region and we believe that this transaction will deliver synergies and benefits that will position Donaco International as a significant participant,” Yew said.
Despite the close relationship with Genting Berhad, Yew said Donaco was a completely separate and independent entity that had its own investment criteria and objectives. He acknowledged that his company benefited from the experience of the family business in areas such as casino development and management.
“Many of our staff at Lao Cai International Hotel have worked and trained with the family business in Malaysia and Singapore,” he said.
At this moment, he said the priority of the combined entity was Lao Cai International Hotel, located in northern mountainous Lao Cai city and close to the border with China’s Yunnan province. This hotel begun operating in 2003 and currently offers eight gaming tables alongside more than 80 slot machines.
This was a successful and profitable venture, which generated $12.5 million of revenue in 2011, with net profit after-tax was $6.2 million, according to Two Way’s announcement. Revenues increased by 38.3 per cent in six months to June, 2012 compared to the corresponding period a year ago.
Currently, Donaco and its Vietnamese partner are undertaking a major expansion at the hotel. Once the expansion is complete, Lao Cai International Hotel will feature 428 rooms, a selection of 26 gaming tables and up to 150 slot machines.
“We believe that Lao Cai International Hotel is well placed to take advantage of the tourism growth from mainland China and is easily accessible because of geographical location near the China border,” Yew said.
He added that while the Lao Cai expansion was a priority, Donaco International would explore a range of new online gaming and potential casino opportunities in the ASEAN bloc.
“The combined skills sets of Two Way and Donaco mean that we can consider new interactive media and gambling applications, while also pursuing new licences that will allow us to develop and operate hotels and casinos in the region,” said Yew.
By Ngoc Linh