SkyCity Raising Funds for Adelaide and Auckland Expansion Projects
Casino operator, SkyCity Entertainment Group, is raising funds from its shareholders to fund its expansion projects in Adelaide in South Australia and in Auckland, New Zealand. The company plans to sell new shares to existing investors, thereby raising NZ$263 million (A$241.3 million).
Existing investors will be offered one additional share for every ten shares held, at a 12.8 percent discount of NZ$4.40 per share from the May 10 price of NZ$5.04.
These funds will allow the group to fund their expansion projects, while maintaining their credit rating and their level of debt. The group had considered other avenues, including selling its planned Auckland hotel and selling off other assets, but has decided against this course of action.
“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,” the company said in a statement.
The company expects to complete the offer by the middle of June, which should then allow them to meet any financial requirements until the middle of the 2018 financial year. The expansion project in South Australia is expected to be completed by the end of 2019 or the beginning of 2020.
In the first ten months of this financial year, to April 30, the company’s revenue on a normalised basis grew 11 percent to NZ$916.9m. Its New Zealand casinos in Auckland, Hamilton and Queenstown recorded a 7.7 percent increase in revenue to NZ$523m. Its Australian casinos in Adelaide and Darwin saw revenue falling 1.7 percent to A$225.5m, although in New Zealand dollar terms, this amounted to a rise of 0.6 percent.
April 16, 2017