Case Study - Donaco Navigating complexity with calm expertise and proven restructuring methodologies.
Capital Raising
Background
Donaco operates leisure and entertainment businesses across the Asia Pacific Region.
Listed on the Australian Stock Exchange: (ASX:DNA)
Significant disputes existed between former owners of the casino estates and the existing management. Disputes diverted attention from the underlying business and weakened cash flow.
Operated in jurisdictions where locals were not able to participate in Donaco’s entertainment suite.
Donaco’s entertainment facilities relied on cross-border traffic.
Covid-19 Pandemic, led to the closure of border crossings. Donaco’s leisure and entertainments businesses had a drastic reduction in patronage.
Appointed to the Board of Directors, to stabilise management and operations through financial difficulties.
Assisted in the financial restructure and capital raising exercise.
Strategy
To find a compromise settlement between parties locked in litigation and ensure an honourable exit for both parties.
Develop options to enhance the financial position of Donaco.
Protect the company during the Covid-19 pandemic.
Refinance a major secured facility.
Develop a business plan for post Covid-19.
Results
New management and a new board were implemented.
All parties exited the dispute on amicable terms.
Steady state business plan was adopted. However, the new business plan was cut short due to Covid-19.
Given the effect of Covid-19, it was necessary to seek further capital to ensure the on-going successful operations.
Cost-cutting plan was introduced to keep the entertainment parks operating on a much lower capacity. Entertainment facilities were placed on care and maintenance.
Capital and lending solutions were examined toprovide the best options for liquidity.
Raised AUD$14,000,000 which provided sufficient funding to operate throughout the Covid-19 pandemic.
Donaco now operates on a cash flow positive basis and is now looking for opportunities
