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SkyCity's A$188M sale of Darwin casino goes unconditional

Friday 29th March 2019

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SkyCity Entertainment Group has wrapped up the A$188 million sale of its Darwin casino to US hospitality company Delaware North. 

The deal went unconditional today after all of the criteria were met, including approvals from the Northern Territory government. The licence runs until 2031 with an option to extend it for another four years and also lets the operator run Keno throughout hotels and clubs in the territory. 

SkyCity bought the Darwin casino and hotel business from US-based MGM Mirage in 2004 for A$195 million. It put the site up for sale last year after writing off A$95 million in 2017 due to new gaming regulations. 

"The sale is consistent with our strategy to sell certain non-core assets and to allocate capital to assets and businesses which we feel are better aligned with our long-term strategic objectives," chief executive Graeme Stephens said in a statement. 

SkyCity still operates its flagship Auckland casino, and casinos in Hamilton, Queenstown and Adelaide. It's got major investment programmes underway in Auckland and Adelaide, and including what it's already spent, estimates capital expenditure of more than $1 billion on those major projects. 

The New Zealand casino operator has retained an A$11 million block of land next to the Darwin site, which it plans to sell separately. 

The shares last traded at $3.80, having gained 7 percent so far this year. 

SkyCity will provide certain services to Delaware to help with the transition. The two companies plan to set up a joint venture to set up an online casino business in the Northern Territory if the state government changes legislation to permit that activity within the next decade. 

Delaware's business interests include casinos, resorts, airport and food service retail and national park services. It operates across North America, New Zealand, Australia, and the UK. 

(BusinessDesk)

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