Legal battles between The Thai Group and Australia listed Donaco International, their once close business partners, is not something new.
The two gaming operators have been at loggerheads for more than five years now and based on how things were going, it seemed like the solution to their disagreement was not forthcoming anytime soon.
However, this might change in the near future, that is if the current efforts to get a lasting solution to their differences are anything to go with. According to a report by CalvinAyre.com, the two groups have agreed to sit at the negotiating table, the main agenda being to dig up the root and find a consensus to end their difference.
This announcement, which was made yesterday, comes a few days after Donaco International released its figures for Q4 2019. The figures showed the dismal performance of the group especially in the month of December. Donaco is hoping that the negotiations will help improve its earnings.
The root cause of their disagreement goes back all the way to 2015 when Donaco purchased the Star Vegas from Thai Group. Instead of running operations themselves, Donaco hired Thai to manage the business for it for two years. Barely a year into the agreement the Thai Group decided to build a gaming venue just next door.
Again, another agreement was reached, where Donaco would manage Star Paradise on behalf of Thai in a sort of quid pro quo side plan.
Unfortunately, their working relationship did not last long as Donaco was flushed out after the original deal expired. Donaco felt cheated and accused the Thai of failing to observe their incomplete agreement. Since then, it has been one legal case after another between the two groups.
Donaco has been seeking to be paid $190 million in compensation for the damages they have suffered in the Star Vegas dispute. They also want to be compensated for the violation of the non-compete agreement. Besides, Thai Group wanted to dump its 17.9% stake in Donaco, a move that was not well received by Donaco.
Donaco moved to court and obtained a freeze order that barred Thai from abandoning their stake at Donaco. In 2018, a Cambodian court ruled that Thai could not terminate the existing agreement with Donaco. The ruling did not bring an end to their battles as it had been expected.
Donaco has written to the Australian Securities Exchange, indicating that it has cut a deal with the Thai Group. Under the memorandum of understanding, the two groups will bring to an end all legal battles for two months. During this period, the two groups will try and find a solution to their long-standing dispute.
This will not be the first time the two groups try to find an amicable solution. All previous efforts have rebounded, meaning that there is a high possibility this one too might just fail. However, it is promising, seeing that both parties are willing to find a long term solution. Hopefully, it will have a positive impact on Donaco’s books.