SkyCity wants at least A$200M for Darwin casino; private consortium most likely buyer: report

Friday 20th April 2018

SkyCity Entertainment Group wants to sell its Darwin casino business in Australia's Northern Territory for at least A$200 million, and hasn't yet attracted a buyer because the asking price is seen as "a little too high", according to a report in The Australian newspaper.

New Zealand's only listed casino company is looking to free up cash from its existing assets during a period of heavy investment and has appointed investment bank Goldman Sachs to test interest in its Darwin casino as it continues to evaluate strategic options for the business, including a full sale. Any funds from a sale would be used to repay debt in the short term, and fund strategic and growth initiatives.

SkyCity is "highly unlikely" to find another casino company to buy the business, the Australian newspaper said, citing sources it didn't identify. A more probable outcome is that a private consortium, which already holds interests in the Northern Territory, acquires the casino, the report said.

Australian casino operator The Star Entertainment Group and Malaysia's Genting Group aren't interested in buying Darwin casino, the newspaper said. It namechecked likely buyers including Darwin's Paspaley family, wealthy local entrepreneur John 'Foxy' Robinson, the Halikos family and the Coombes family. Information memorandums for the business were now circulating in the market, the newspaper said.

SkyCity bought the Darwin casino and hotel business from US-based MGM Mirage in 2004 for A$195 million ($230.6 million) including costs and taxes, as part of its Australian expansion following its purchase of Adelaide casino. In its latest financial year, the company wrote down its Darwin investment by A$95 million to A$195 million after it recognised the business had been hurt by increased rivalry from gaming machines in local pubs and clubs over the past two years.

The company's shares last traded at $3.93, and have slid 10 percent over the past year.

(BusinessDesk)

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