Adelaide Casino owner SkyCity in bid to raise funds for SA expansion, Auckland project
ADELAIDE casino owner SkyCity is raising money from shareholders to fund its SA and Auckland expansion projects.
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ADELAIDE casino owner SkyCity is raising money from shareholders to fund its SA and Auckland expansion projects.
Publicly listed company SkyCity Entertainment Group today announced plans to raise $NZ263 million ($A241.3 million) by selling new shares to existing investors.
This will enable it to keep its debt in check and maintain its credit rating while funding expansion in Auckland and Adelaide.
The group said the expansion of its Adelaide property will be completed by late 2019 or early 2020.
The Auckland-based company is offering to sell its investors one new share for every 10 held, at a price of $NZ4.40 apiece, a 12.8 per cent discount to the five-day volume weighted average price of $NZ5.04 as at May 10, it said.
SkyCity has been exploring ways to finance major property development projects, including a 5-star hotel and convention centre in Auckland, and a redevelopment of its Adelaide casino.
It wants to do that while keeping its debt at the level needed to retain its BBB- credit rating with Standard & Poor’s.
It decided against selling its planned Auckland hotel after failing to attract high enough bids and has nixed the prospect of selling other assets, changing its dividend policy, or issuing hybrid debt.
“SkyCity has concluded that undertaking the offer to raise new equity is the best option for the company and its shareholders, and expects that this will underpin the funding plan for its two major growth projects in Auckland and Adelaide,” it said.
The offer is expected to be completed by mid-June and the company anticipates existing debt facilities should then be sufficient to meet future funding requirements out to the middle of its 2018 financial year.
Separately, the casino company said revenue on a normalised basis increased 11 per cent to $NZ916.9m in the first 10 months of its financial year through April 30.
Its New Zealand casinos in Auckland, Hamilton and Queenstown lifted revenue 7.7 per cent to $NZ523m.
In Australia, revenue at its casinos in Darwin and Adelaide slipped 1.7 per cent to $A225.5m, although they recorded a gain of 0.6 per cent in New Zealand dollar terms.
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