Donaco to buy back 37.2 million shares

    Australia-listed Donaco, which recently opened a luxury casino in northern Vietnam, said it is beginning an on-market buyback of 37.2 million shares, or about 8 percent of the total issued share capital.
    The company said it’s carrying out the buyback as part of its ongoing capital management program and that the recent price of its shares do not reflect the full value and potential of the business.
    News of the transaction sent the stock up more than 5 percent in Tuesday’s trading session to $0.87, towards the mid point of the 52-week range of $0.33 – $1.61.
    The buyback is expected to begin from August 6th and will be at a price no higher than 5 percent above the average closing price of the prior five days, in accordance with stock exchange rules.
    Donaco said it has a substantial amount of cash on its balance sheet and negligible debt.
    “This balance sheet strength gives us considerable firepower to pursue a strong pipeline of acquisition and investment opportunities, which we are actively working on,” managing director and CEO Joey Lim said.
    The company is currently in the process of spinning off its iSentric mobile technology business to focus on the casino and leisure industry.
    It opened the Aristo International Hotel in Lao Cai in May, which it says has reported strong revenue growth since beginning operations. However, it also warned in early May that two other opportunities it had been pursuing for expansion were not likely to come to fruition in the short term.
    Donaco said the buyback will boost earnings per share.
    The company has called an extraordinary general meeting for August 25th in Sydney to approve the iSentric spinoff. Shareholders will receive 0.13 shares for every Donaco share held. If approved iSentric will begin trading as a separate company by mid-September.